LKQ closes below its opening price unable to hold early session gains
LKQ Corporation (LKQ) Technical Analysis Report for Mar 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, LKQ finished the month -30.66% lower at 20.51 after edging lower $0.49 (-2.33%) today, underperforming the S&P 500 (-1.6%). Trading $0.53 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on March 11th, LKQ lost -11.12% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (LKQ as at Mar 31, 2020):
Tuesday's trading range has been $1.15 (5.5%), that's far below the last trading month's daily average range of $2.15. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for LKQ. Prices continued to consolidate within a tight trading range between 20.20 and 21.78 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 20.20 (S1). The market was bought again around 20.30 after having seen lows at 20.20, 20.30 and 20.02 in the last three trading sessions. Obviously there is something going on at that level.
While the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the nearby swing low at 20.20 where further sell stops might get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for LKQ. Out of 516 times, LKQ closed higher 50.78% 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 57.36% with an average market move of 0.64%.