LEG runs into sellers again around 40.16
Leggett & Platt Incorporated (LEG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 5th day in a row, LEG finished the month 14.05% higher at 40.09 after gaining $0.30 (0.75%) today on high volume, slightly underperforming the S&P 500 (0.77%). Today's close at 40.09 marks the highest recorded closing price since March 4th. Trading up to $1.27 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 40.00, Leggett & Platt confirmed its breakout through the previous session high after trading up to $0.16 above it intraday.
Daily Candlestick Chart (LEG as at Jul 31, 2020):
Friday's trading range has been $1.65 (4.15%), that's above the last trading month's daily average range of $1.41. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LEG.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After having been unable to move above 40.00 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 40.16. The last time this happened on July 24th, LEG actually gained 3.81% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 36.56.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Leggett & Platt. Out of 70 times, LEG closed higher 51.43% 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 64.29% with an average market move of 0.62%.