KEM closes below its opening price unable to hold early session gains


KEMET Corporation (KEM) Technical Analysis Report for May 29, 2020 | by Techniquant Editorial Team

Highlights

KEM closes below its opening price unable to hold early session gains
KEM unable to break through key resistance level
KEM closes lower for the 2nd day in a row
KEM breaks below Thursday's low

Overview

Moving lower for the 2nd day in a row, KEM ended the month 0.07% higher at 27.03 after losing $0.02 (-0.07%) today, underperforming the S&P 500 (0.48%). Trading $0.03 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on May 21st, KEM actually gained 0.04% on the following trading day. Closing below Thursday's low at 27.05, KEMET confirmed its breakout through the previous session low after trading up to $0.03 below it intraday.

Daily Candlestick Chart (KEM as at May 29, 2020):

Daily technical analysis candlestick chart for KEMET Corporation (KEM) as at May 29, 2020

Friday's trading range has been $0.07 (0.26%), that's slightly below the last trading month's daily average range of $0.07. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for KEM.

Unable to break through the key technical resistance level at 27.07 (R1), the stock closed below it after spiking up to 27.09 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.

Although the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.

Buying might accelerate should prices move above the close-by swing high at 27.11 where further buy stops could get activated. With prices trading close to this year's high at 27.21, upside momentum might speed up should KEM be able to break out to new highs for the year. As prices are trading close to May's low at 26.97, downside momentum could accelerate should the market mark new lows for the month.

Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for KEMET. Out of 513 times, KEM closed higher 50.29% 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 54.19% with an average market move of 1.51%.


Market Conditions for KEM as at May 29, 2020

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