LKQ still stuck within tight trading range
LKQ Corporation (LKQ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
LKQ ended the week 7.33% higher at 25.33 after edging lower $0.19 (-0.74%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (LKQ as at May 22, 2020):
Friday's trading range has been $0.61 (2.4%), that's far below the last trading month's daily average range of $1.18. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for LKQ. Prices continued to consolidate within a tight trading range between 24.71 and 26.04 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on November 8, 2019, LKQ actually gained 0.14% on the following trading day.
Prices are trading close to the key technical resistance level at 25.60 (R1).
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 26.00 where further buy stops might get triggered. Further buying could move prices higher should the market test April's close-by high at 27.50.
Among the two market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for LKQ. Out of 739 times, LKQ closed higher 52.64% 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 54.80% with an average market move of 0.70%.