LEG closes higher for the 3rd day in a row
Leggett & Platt Incorporated (LEG) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, LEG finished the week 12.7% higher at 29.99 after edging higher $0.27 (0.91%) today, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.65 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 15th, LEG gained 14.39% on the following trading day. 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 (LEG as at May 22, 2020):
Friday's trading range has been $1.03 (3.48%), that's far below the last trading month's daily average range of $2.01. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LEG. Prices continued to consolidate within a tight trading range between 28.52 and 30.75 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 29.66 (S1). The market was sold again around 30.00 after having seen highs at 30.19, 29.92 and 29.98 in the last three trading sessions. Obviously there is something going on at that level.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 30.19 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 28.52 where further sell stops might get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. Its common bearish interpretation has been confirmed for Leggett & Platt. Out of 26 times, LEG closed lower 69.23% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 80.77% with an average market move of -2.77%.