LITE breaks back below 20-day moving average
Lumentum Holdings Inc. (LITE) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
LITE finished Thursday at 71.30 losing $3.75 (-5.0%), strongly underperforming the S&P 500 (6.24%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (LITE as at Mar 26, 2020):
Thursday's trading range has been $8.77 (11.47%), that's above the last trading month's daily average range of $7.02. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for LITE. Prices continued to consolidate within a tight trading range between 68.92 and 78.22 where it has been caught now for the last three trading days.
Notwithstanding a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 68.25 (S1). The share closed back below the 20-day moving average at 73.58. When this moving average was crossed below the last time on March 6th, LITE lost -10.93% on the following trading day. The market found buyers again today around 69.20 for the third trading day in a row after having found demand at 70.20 in the previous session and at 68.92 two days ago.
Lumentum Holdings shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Lumentum Holdings. Out of 242 times, LITE closed higher 56.61% 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 55.79% with an average market move of 1.86%.