KSU closes lower for the 4th day in a row
Kansas City Southern (KSU) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, KSU ended the week -8.5% lower at 102.57 after losing $0.38 (-0.37%) today on high volume, significantly underperforming the S&P 500 (1.42%). Today's close at 102.57 marks the lowest recorded closing price since November 15, 2017. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (KSU as at Oct 12, 2018):
Friday's trading range has been $2.62 (2.52%), that's slightly above the last trading month's daily average range of $2.21. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for KSU.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on Tuesday, KSU actually lost -4.62% on the following trading day.
Prices are trading close to the key technical resistance level at 104.71 (R1).
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 113.25.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 99.47, downside momentum could accelerate should Kansas City break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Kansas City. Out of 53 times, KSU closed higher 56.60% 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 62.26% with an average market move of 0.13%.