LM finds buyers at key support level
Legg Mason Inc. (LM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, LM ended the week 2.6% higher at 40.72 after edging lower $0.04 (-0.1%) today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' 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 (LM as at Feb 14, 2020):
Friday's trading range has been $0.47 (1.15%), that's far below the last trading month's daily average range of $0.82. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for LM.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
After trading down to 40.53 earlier during the day, Legg Mason bounced off the key technical support level at 40.61 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 40.53 in the prior session, the stock found buyers again around the same price level today at 40.53. The last time this happened on Monday, LM gained 0.99% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Legg Mason. Out of 414 times, LM closed higher 52.66% 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 55.56% with an average market move of 0.55%.