LAD declines to lowest close since August 4th
Lithia Motors Inc. (LAD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, LAD finished Wednesday at 237.03 losing $4.22 (-1.75%), significantly underperforming the S&P 500 (-0.46%). Today's close at 237.03 marks the lowest recorded closing price since August 4th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 240.27, the share confirmed its breakout through the prior session low after trading up to $3.45 below it intraday.
Daily Candlestick Chart (LAD as at Sep 16, 2020):
Wednesday's trading range has been $6.87 (2.82%), that's far below the last trading month's daily average range of $10.11. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for LAD.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Though the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 246.95 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 235.43 where further sell stops might get activated. Further selling could move prices lower should the market test August's close-by low at 229.38.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Lithia Motors. Out of 297 times, LAD closed higher 62.63% 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 59.60% with an average market move of 1.97%.