LEA breaks below 200-day moving average for the first time since July 14th
Lear Corporation (LEA) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, LEA finished the month 1.25% higher at 110.38 after losing $2.82 (-2.49%) today, strongly underperforming the S&P 500 (0.77%). Closing below Thursday's low at 112.46, the share confirmed its breakout through the prior session low after trading up to $3.46 below it intraday.
Daily Candlestick Chart (LEA as at Jul 31, 2020):
Friday's trading range has been $3.85 (3.42%), that's above the last trading month's daily average range of $3.23. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LEA.
One bearish candlestick pattern matches today's price action, the Black Candle.
Lear closed below the 200-day moving average at 112.82 for the first time since July 14th. When this moving average was crossed below the last time on June 11th, LEA actually gained 2.75% on the following trading day.
Although the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Lear. Out of 150 times, LEA closed higher 52.67% 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 61.33% with an average market move of 0.49%.