LEN-B closes above its opening price after recovering from early selling pressure
Lennar Corporation Class B (LEN-B) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
LEN-B ended the week 2.65% higher at 55.30 after losing $0.29 (-0.52%) today, underperforming the S&P 500 (0.06%). Trading up to $0.98 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (LEN-B as at Aug 07, 2020):
Friday's trading range has been $1.27 (2.3%), that's below the last trading month's daily average range of $1.81. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for LEN-B. Prices continued to consolidate within a tight trading range between 54.07 and 55.89 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji. The last time a Doji showed up on May 11th, LEN-B lost -3.91% on the following trading day.
Unable to break through the key technical resistance level at 55.43 (R1), Lennar closed below it after spiking up to 55.55 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 55.89 where further buy stops could get activated. With prices trading close to this year's high at 56.32, upside momentum might accelerate should the market be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Doji" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for Lennar. Out of 110 times, LEN-B closed lower 53.64% 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 two trading days, showing a win rate of 54.55% with an average market move of -0.41%.