LUV closes within previous day's range after lackluster session
Southwest Airlines Company (LUV) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
LUV finished the month 6.48% higher at 34.18 after losing $0.86 (-2.45%) today, notably underperforming the S&P 500 (1.54%). 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 (LUV as at Jun 30, 2020):
Tuesday's trading range has been $1.42 (4.06%), that's below the last trading month's daily average range of $2.35. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for LUV.
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. After moving higher in the previous session, the share closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on June 26th, LUV actually gained 9.64% on the following trading day.
Prices are trading close to the key technical resistance level at 35.36 (R1).
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 35.36 where further buy stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Southwest Airlines. Out of 43 times, LUV closed higher 62.79% 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 72.09% with an average market move of 2.18%.