LITE finds buyers again around 77.57
Lumentum Holdings Inc. (LITE) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
LITE finished the week 1.95% higher at 78.46 after losing $0.55 (-0.7%) today, but still slightly outperforming the S&P 500 (-0.9%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (LITE as at Jan 24, 2020):
Friday's trading range has been $2.74 (3.43%), that's above the last trading month's daily average range of $2.08. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for LITE.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Notwithstanding a strong opening Lumentum Holdings closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on January 9th, LITE lost -1.61% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical resistance level at 79.17 (R1). After having been unable to move lower than 77.81 in the prior session, the stock found buyers again around the same price level today at 77.57.
Although the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 80.52 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 76.28 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Lumentum Holdings. Out of 334 times, LITE closed higher 55.39% 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 60.18% with an average market move of 2.44%.