LITE dominated by bears dragging the market lower throughout the day
Lumentum Holdings Inc. (LITE) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, LITE ended the week -21.66% lower at 46.32 after tanking $3.88 (-7.73%) today on high volume, notably underperforming the S&P 500 (-0.58%). Today's close at 46.32 marks the lowest recorded closing price since February 14th. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (LITE as at May 17, 2019):
Friday's trading range has been $3.48 (7.06%), that's far above the last trading month's daily average range of $2.31. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for LITE.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 46.34 (now R1), which is likely to act as resistance going forward.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally 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 up towards the center of the Bollinger Bands at 59.11.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Trading close to March's low at 45.17 we might see further downside momentum if potential sell stops at the level get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Lumentum Holdings. Out of 51 times, LITE closed higher 60.78% 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 70.59% with an average market move of 7.63%.