LB closes below its opening price unable to hold early session gains
L Brands Inc. (LB) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
LB ended the week 3.22% higher at 24.34 after gaining $0.06 (0.25%) today, slightly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $0.19 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on February 3rd, LB actually gained 6.06% on the following trading day. 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 (LB as at Feb 14, 2020):
Friday's trading range has been $0.50 (2.04%), that's below the last trading month's daily average range of $0.80. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LB.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 23.84 (S1). After having been unable to move above 24.62 in the prior session, L Brands ran into sellers again around the same price level today, missing to move higher than 24.65.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 23.84 where further sell stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for L Brands. Out of 218 times, LB closed higher 58.26% 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 53.67% with an average market move of 0.30%.