ITW pushes through key technical resistance level
Illinois Tool Works Inc. (ITW) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, ITW ended Thursday at 150.49 gaining $6.96 (4.85%) on low volume, strongly underperforming the S&P 500 (6.24%). Trading up to $4.70 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Wednesday's high at 149.90, the share confirmed its breakout through the prior session high after trading up to $1.88 above it intraday.
Daily Candlestick Chart (ITW as at Mar 26, 2020):
Thursday's trading range has been $8.90 (6.03%), that's slightly below the last trading month's daily average range of $10.99. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for ITW.
Buyers managed to take out the key technical resistance level at 150.00 (now S1), which is likely to act as support going forward. After having been unable to move above 149.90 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 151.78. The last time this happened on March 20th, ITW lost -6.11% on the following trading day.
While Illinois Tool is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Its common bullish interpretation has been confirmed for Illinois Tool. Out of 239 times, ITW closed higher 51.88% 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 61.51% with an average market move of 0.72%.