IR breaks below Thursday's low
Ingersoll-Rand plc (IR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
IR ended the week 8.02% higher at 28.54 after losing $0.87 (-2.96%) today, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 28.65, the stock confirmed its breakout through the previous session low after trading up to $0.22 below it intraday.
Daily Candlestick Chart (IR as at May 22, 2020):
Friday's trading range has been $1.03 (3.5%), that's slightly below the last trading month's daily average range of $1.18. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IR.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on May 12th, IR lost -5.61% on the following trading day. Despite a strong opening Ingersoll-Rand plc closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After having been unable to move above 29.41 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 29.46.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 29.66 where further buy stops could get activated. Further buying might move prices higher should the market test April's close-by high at 30.48.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Ingersoll-Rand plc. Out of 38 times, IR closed higher 71.05% 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 63.16% with an average market move of 2.37%.