LAD breaks below key technical support level
Lithia Motors Inc. (LAD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, LAD finished the month 51.42% higher at 229.15 after losing $3.65 (-1.57%) today, strongly underperforming the S&P 500 (0.77%). Closing below Thursday's low at 230.00, the market confirmed its breakout through the prior session low after trading up to $9.36 below it intraday.
Daily Candlestick Chart (LAD as at Jul 31, 2020):
Friday's trading range has been $14.34 (6.16%), that's above the last trading month's daily average range of $9.91. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for LAD.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
Prices broke below the key technical support level at 231.36 (now R1), which is likely to act as resistance going forward. The last time this happened on June 11th, LAD actually gained 2.40% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Its common bullish interpretation has been confirmed for Lithia Motors. Out of 105 times, LAD closed higher 66.67% 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 66.67% with an average market move of 2.78%.