ILMN unable to break through key resistance level
Illumina Inc. (ILMN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, ILMN finished the month 3.19% higher at 382.16 after edging lower $0.62 (-0.16%) today, notably underperforming the Nasdaq 100 (1.78%). Trading up to $4.77 lower after the open, Illumina managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (ILMN as at Jul 31, 2020):
Friday's trading range has been $7.45 (1.95%), that's below the last trading month's daily average range of $10.38. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ILMN.
Two candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and one neutral pattern, the Doji. The last time a Southern Doji showed up on March 16th, ILMN gained 6.99% on the following trading day.
Unable to break through the key technical resistance level at 384.21 (R1), the market closed below it after spiking up to 384.68 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
Although the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the close-by swing low at 376.63 where further sell stops could get triggered. With prices trading close to this year's high at 402.14, upside momentum might speed up should the share be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Illumina. Out of 56 times, ILMN closed higher 53.57% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 64.29% with an average market move of 3.06%.