LB closes within previous day's range after lackluster session
L Brands Inc. (LB) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
LB ended the month -7.54% lower at 14.97 after losing $0.15 (-0.99%) today on low volume, strongly underperforming the S&P 500 (1.54%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (LB as at Jun 30, 2020):
Tuesday's trading range has been $0.50 (3.34%), that's far below the last trading month's daily average range of $1.08. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for LB.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, the share closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, three candlestick patterns are matching today's price action, the Bearish Harami Cross Pattern and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji.
Unable to break through the key technical resistance level at 15.05 (R1), L Brands closed below it after spiking up to 15.13 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move above 15.18 in the prior session, the stock ran into sellers again around the same price level today, failing to move higher than 15.13. The last time this happened on June 26th, LB actually gained 9.09% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 15.18 where further buy stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Cross Pattern" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for L Brands. Out of 6 times, LB closed higher 83.33% 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 1.20%.