LB closes higher for the 3rd day in a row
L Brands Inc. (LB) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, LB finished Wednesday at 27.43 edging higher $0.09 (0.33%), slightly outperforming the S&P 500 (0.3%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (LB as at Feb 13, 2019):
Wednesday's trading range has been $0.81 (2.95%), that's slightly above the last trading month's daily average range of $0.78. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for LB.
Three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji. The last time a Northern Doji showed up on May 29, 2018, LB actually gained 2.32% on the following trading day.
After trading down to 26.82 earlier during the day, the stock bounced off the key technical support level at 27.23 (S1). The failure to close below the support could increase that levels significance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 27.95 where further buy stops could get activated. As prices are trading close to February's high at 28.27, upside momentum might accelerate should L Brands mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for L Brands. Out of 63 times, LB closed higher 58.73% 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 65.08% with an average market move of 1.07%.