ITW closes above its opening price after recovering from early selling pressure
Illinois Tool Works Inc. (ITW) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ITW finished the month 5.8% higher at 184.99 after losing $0.68 (-0.37%) today, strongly underperforming the S&P 500 (0.77%) following today's earnings report. Trading up to $1.69 lower after the open, the share 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.
Daily Candlestick Chart (ITW as at Jul 31, 2020):
ITW reported earnings of $1.09 per share before today's market open. With analysts having expected an EPS of $0.7, Illinois Tool Works Inc. surpassed market expectations by 55.7%. The company's last earnings report was released on May 5, 2020, when Illinois Tool Works Inc. reported earnings of $1.77 per share beating market expectations by 2.9%.
Friday's trading range has been $2.90 (1.57%), that's slightly below the last trading month's daily average range of $2.94. 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 ITW.
Prices are trading close to the key technical support level at 184.72 (S1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 188.11 where further buy stops might get activated. With prices trading close to this year's high at 190.85, upside momentum could accelerate should the stock be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post Earnings Report" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Illinois Tool. Out of 31 times, ITW closed higher 54.84% 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 70.97% with an average market move of 1.92%.