LMT breaks below key technical support level
Lockheed Martin Corporation (LMT) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
LMT ended the month -6.05% lower at 364.92 after losing $2.58 (-0.7%) today, strongly underperforming the S&P 500 (1.54%). Trading $1.90 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on June 26th, LMT actually gained 3.01% on the following trading day. 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 (LMT as at Jun 30, 2020):
Tuesday's trading range has been $4.84 (1.32%), that's far below the last trading month's daily average range of $9.24. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LMT.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices broke below the key technical support level at 365.09 (now R1), which is likely to act as resistance going forward. The stock ran into sellers again today around 367.25 for the third trading day in a row after having found sellers at 367.50 in the previous session and at 367.42 two days ago.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 367.50 where further buy stops might get activated. Further selling could move prices lower should the market test May's close-by low at 352.26.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Lockheed Martin. Out of 554 times, LMT closed higher 54.33% 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 60.29% with an average market move of 0.64%.