LAD closes above its opening price after recovering from early selling pressure
Lithia Motors Inc. (LAD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, LAD ended the week -1.84% lower at 131.00 after edging higher $0.13 (0.1%) today, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $2.11 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 prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (LAD as at Feb 14, 2020):
Friday's trading range has been $2.64 (2.02%), that's below the last trading month's daily average range of $4.70. 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 LAD.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Takuri Line. The last time a Takuri Line showed up on January 3rd, LAD actually lost -3.04% on the following trading day.
Prices are trading close to the key technical support level at 127.53 (S1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 126.74 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Lithia Motors. Out of 697 times, LAD closed higher 54.23% 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 58.97% with an average market move of 1.73%.