LOW closes above its opening price after recovering from early selling pressure
Lowe's Companies Inc. (LOW) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, LOW finished the week 7.44% higher at 122.25 after gaining $1.61 (1.33%) today, significantly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 122.25 marks the highest recorded closing price since February 24th. Trading up to $1.93 lower after the open, Lowe's Companies managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 121.25, the stock confirmed its breakout through the prior session high after trading up to $1.28 above it intraday.
Daily Candlestick Chart (LOW as at May 22, 2020):
Friday's trading range has been $3.46 (2.86%), that's slightly below the last trading month's daily average range of $3.56. 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 LOW.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern. The last time a Bearish Hikkake Pattern showed up on May 7th, LOW actually gained 2.06% on the following trading day.
Unable to break through the key technical resistance level at 122.41 (R1), the share closed below it after spiking up to 122.53 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 122.69 where further buy stops could get activated. With prices trading close to this year's high at 126.73, upside momentum might accelerate should the market be able to break out to new highs for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "6 Consecutive Higher Closes" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Lowe's Companies. Out of 24 times, LOW closed lower 75.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.17% with an average market move of -0.26%.