LOW unable to break through key resistance level
Lowe's Companies Inc. (LOW) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
LOW finished Wednesday at 166.71 losing $2.32 (-1.37%), underperforming the S&P 500 (-0.46%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (LOW as at Sep 16, 2020):
Wednesday's trading range has been $5.61 (3.29%), that's slightly above the last trading month's daily average range of $4.64. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for LOW.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Even with a strong opening Lowe's Companies closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 163.68 (S1). Unable to break through the key technical resistance level at 170.83 (R1), the market closed below it after spiking up to 171.72 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 166.62 in the previous session, the share found buyers again around the same price level today at 166.11. The last time this happened on September 1st, LOW gained 1.73% on the following trading day.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for Lowe's Companies. Out of 549 times, LOW closed higher 55.19% 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 62.66% with an average market move of 1.20%.