LKQ breaks back below 100-day moving average
LKQ Corporation (LKQ) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
LKQ ended the week 0.82% higher at 33.20 after losing $0.65 (-1.92%) today, notably underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 33.49, the share confirmed its breakout through the previous session low after trading up to $0.37 below it intraday.
Daily Candlestick Chart (LKQ as at Feb 14, 2020):
Friday's trading range has been $0.79 (2.33%), that's above the last trading month's daily average range of $0.67. 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 slightly lower than usual for LKQ.
Regardless of a strong opening the market 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 32.91 (S1). The stock closed back below the 100-day moving average at 33.83. When this moving average was crossed below the last time on February 6th, LKQ lost -0.87% on the following trading day. LKQ was sold again around 33.91 after having seen highs at 33.94, 33.91 and 33.85 in the last three trading sessions. Obviously there is something going on at that level.
The share shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might accelerate should prices move below the nearby swing low at 32.70 where further sell stops could get activated. With prices trading close to this year's low at 32.47, downside momentum might speed up should the market break out to new lows for the year.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for LKQ. Out of 30 times, LKQ closed higher 53.33% 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 60.00% with an average market move of 0.82%.