ITW closes within previous day's range
Illinois Tool Works (ITW) Technical Analysis Report for Oct 12, 2018
ITW ended the week -7.33% lower at 130.67 after gaining $1.32 (1.02%) today, slightly underperforming the S&P 500 (1.42%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (ITW as at Oct 12, 2018):
Friday's trading range has been $3.20 (2.43%), that's above the last trading month's daily average range of $2.38. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for ITW.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 128.75 (S1). After having been unable to move lower than 128.75 in the previous session, the share found buyers again around the same price level today at 128.84. The last time this happened on October 3rd, ITW actually lost -0.13% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 141.90.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 128.75 where further sell stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Illinois Tool. Out of 121 times, ITW closed higher 57.02% 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 57.85% with an average market move of 0.42%.