KLAC unable to break through key resistance level
KLA-Tencor Corporation (KLAC) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
KLAC ended the week 6.77% higher at 176.28 after losing $2.44 (-1.37%) today on low volume, notably underperforming the Nasdaq 100 (0.29%) ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (KLAC as at Feb 14, 2020):
Friday's trading range has been $4.83 (2.7%), that's slightly below the last trading month's daily average range of $4.90. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for KLAC. Prices continued to consolidate within a tight trading range between 173.85 and 180.08 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 172.86 (S1). Unable to break through the key technical resistance level at 179.71 (R1), the stock closed below it after spiking up to 179.72 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 174.91 in the previous session, KLA-Tencor found buyers again around the same price level today at 174.89. The last time this happened on Monday, KLAC gained 2.44% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 180.08 where further buy stops might get activated. With prices trading close to this year's high at 184.50, upside momentum could speed up should the market be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for KLA-Tencor. Out of 506 times, KLAC closed higher 57.31% 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 59.49% with an average market move of 1.23%.