LEG still stuck within tight trading range
Leggett & Platt Incorporated (LEG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
LEG finished Wednesday at 44.53 gaining $0.42 (0.95%), notably outperforming the S&P 500 (-0.46%). Trading $0.62 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (LEG as at Sep 16, 2020):
Wednesday's trading range has been $1.03 (2.31%), that's slightly below the last trading month's daily average range of $1.15. Weekly volatility is also lower, being slightly 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 43.25 and 45.33 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Gravestone Doji and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji. The last time a Gravestone Doji showed up on July 28th, LEG actually gained 4.23% on the following trading day.
Prices are trading close to the key technical support level at 43.70 (S1). After having been unable to move above 45.10 in the prior session, the stock ran into sellers again around the same price level today, failing to move higher than 45.20.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 45.33 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 43.85 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Leggett & Platt. Out of 390 times, LEG closed higher 50.77% 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 57.44% with an average market move of 0.48%.