LEA breaks below key technical support level
Lear Corporation (LEA) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
LEA finished Wednesday at 120.98 losing $2.57 (-2.08%) on high volume, significantly underperforming the S&P 500 (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 121.60, the share confirmed its breakout through the prior session low after trading up to $1.32 below it intraday.
Daily Candlestick Chart (LEA as at Sep 16, 2020):
Wednesday's trading range has been $3.16 (2.56%), that's slightly below the last trading month's daily average range of $3.42. Things look different on the weekly timeframe, where the market's trading range of the last week has been 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.
Prices are trading close to the key technical support level at 118.62 (S1). Prices broke below the key technical support level at 122.18 (now R1), which is likely to act as resistance going forward. The last time this happened on September 10th, LEA actually gained 1.64% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 124.30 where further buy stops might get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Lear. Out of 527 times, LEA closed higher 52.18% 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 56.74% with an average market move of 0.95%.