LM closes higher for the 3rd day in a row
Legg Mason Inc. (LM) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, LM ended Thursday at 48.77 gaining $0.91 (1.9%) on low volume, strongly underperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 48.71, the stock confirmed its breakout through the prior session high after trading up to $0.13 above it intraday.
Daily Candlestick Chart (LM as at Mar 26, 2020):
Thursday's trading range has been $0.66 (1.37%), that's slightly below the last trading month's daily average range of $1.21. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for LM.
One bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on March 13th, LM actually lost -4.53% on the following trading day.
Legg Mason managed to close back above the 20-day moving average at 48.34 for the first time since March 11th. Prices are trading close to the key technical resistance level at 49.92 (R1). After having been unable to move above 48.71 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 48.84.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 50.70, upside momentum might accelerate should the market be able to break out to new highs for the year. As prices are trading close to March's high at 50.05, upside momentum could speed up should LM mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed above last periods high" stand out. Its common bullish interpretation has been confirmed for Legg Mason. Out of 426 times, LM closed higher 50.70% 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 56.34% with an average market move of 0.60%.