LW breaks back below 100-day moving average
Lamb Weston Holdings Inc. (LW) Technical Analysis Report for Jul 12, 2019 | by Techniquant Editorial Team
LW finished the week 2.47% higher at 65.93 after tanking $1.65 (-2.44%) today, strongly underperforming the S&P 500 (0.46%). This is the biggest single-day loss in over three weeks. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 66.25, the market confirmed its breakout through the previous session low after trading up to $0.36 below it intraday.
Daily Candlestick Chart (LW as at Jul 12, 2019):
Friday's trading range has been $1.87 (2.77%), that's above the last trading month's daily average range of $1.46. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for LW.
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. In spite of a strong opening the share 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 65.23 (S1). Lamb Weston closed back below the 100-day moving average at 67.17. After having been unable to move above 67.75 in the previous session, the stock ran into sellers again around the same price level today, failing to move higher than 67.76. The last time this happened on July 2nd, LW actually gained 1.76% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 62.89.
Although LW is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Lamb Weston. Out of 28 times, LW closed higher 64.29% 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 64.29% with an average market move of 1.25%.