L unable to break through key resistance level
Loews Corporation (L) Technical Analysis Report for Mar 15, 2019 | by Techniquant Editorial Team
L finished the week 1.92% higher at 47.78 after losing $0.11 (-0.23%) today on high volume, underperforming the S&P 500 (0.5%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (L as at Mar 15, 2019):
Friday's trading range has been $0.45 (0.94%), that's below the last trading month's daily average range of $0.54. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for L. Prices continued to consolidate within a tight trading range between 47.59 and 48.20 where it has been caught now for the last three trading days.
Four candlestick patterns are matching today's price action, the Gravestone Doji, the Northern Doji and the Shooting Star which are known as bearish patterns and one neutral pattern, the Doji. The last time a Shooting Star showed up on February 25th, L lost -0.83% on the following trading day.
Unable to break through the key technical resistance level at 48.12 (R1), the share closed below it after spiking up to 48.20 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
While the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 47.59 where further sell stops might get activated. With prices trading close to this year's high at 48.59, upside momentum could speed up should the stock be able to break out to new highs for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Its common bearish interpretation has been confirmed for Loews. Out of 60 times, L closed lower 61.67% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 58.33% with an average market move of -0.10%.