LKQ breaks back below 200-day moving average
LKQ Corporation (LKQ) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
LKQ finished the month 7.6% higher at 28.19 after losing $1.02 (-3.49%) today, significantly underperforming the S&P 500 (0.77%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (LKQ as at Jul 31, 2020):
Friday's trading range has been $1.69 (5.76%), that's far above the last trading month's daily average range of $0.96. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LKQ.
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. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 27.50 (S1). The market closed back below the 200-day moving average at 29.12. When this moving average was crossed below the last time on June 9th, LKQ lost -3.65% on the following trading day.
While 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.
Selling could accelerate should prices move below the nearby swing low at 27.28 where further sell stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for LKQ. Out of 35 times, LKQ closed higher 60.00% of the time on the next trading day after the market condition occurred.