ITW finds buyers around 162.77 for the third day in a row

Illinois Tool Works Inc. (ITW) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team


ITW breaks back below 200-day moving average
ITW finds buyers around 162.77 for the third day in a row
ITW closes lower for the 2nd day in a row
ITW still stuck within tight trading range
ITW closes within previous day's range after lackluster session


Moving lower for the 2nd day in a row, ITW finished the week 5.18% higher at 163.75 after edging lower $0.35 (-0.21%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.

Daily Candlestick Chart (ITW as at May 22, 2020):

Daily technical analysis candlestick chart for Illinois Tool Works Inc. (ITW) as at May 22, 2020

Friday's trading range has been $1.59 (0.97%), that's far below the last trading month's daily average range of $4.63. 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 ITW. Prices continued to consolidate within a tight trading range between 161.26 and 166.49 where it has been caught now for the whole last trading week.

Prices are trading close to the key technical support level at 161.26 (S1). The stock closed back below the 200-day moving average at 164.05. The market found buyers again today around 162.77 for the third trading day in a row after having found demand at 163.43 in the prior session and at 163.50 two days ago. The last time this happened on March 31st, ITW actually lost -3.41% on the following trading day.

While still in a long-term downtrend, the short and medium-term trends both turned bullish already.

Buying might speed up should prices move above the close-by swing high at 166.49 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 161.26 where further sell stops could get triggered. Further buying might move prices higher should the market test April's close-by high at 170.90.

Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Illinois Tool. Out of 28 times, ITW closed higher 60.71% 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 six trading days, showing a win rate of 60.71% with an average market move of 0.08%.

Market Conditions for ITW as at May 22, 2020

Loading Market Conditions for ITW (Illinois Tool Works Inc.)...
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