LILA finds buyers at key support level
Liberty Latin America Ltd. (LILA) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, LILA finished the week -0.52% lower at 17.08 after edging lower $0.03 (-0.18%) today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $0.11 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (LILA as at Feb 14, 2020):
Friday's trading range has been $0.25 (1.47%), that's far below the last trading month's daily average range of $0.40. 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 LILA.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish Spinning Top showed up on January 16th, LILA actually lost -1.88% on the following trading day.
After trading down to 16.93 earlier during the day, the stock bounced off the key technical support level at 16.94 (S1). The failure to close below the support could increase that levels significance as support going forward.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
With prices trading close to this year's low at 16.66, downside momentum might accelerate should the share break out to new lows for the year. Trading close to December's low at 16.63 we could see further downside momentum if potential sell stops at the level get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Liberty Latin. Out of 53 times, LILA closed lower 56.60% 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 62.26% with an average market move of -0.58%.