LW breaks back above 50-day moving average
Lamb Weston Holdings Inc. (LW) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
LW ended the week 9.85% higher at 57.22 after gaining $1.39 (2.49%) today, significantly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (LW as at May 22, 2020):
Friday's trading range has been $1.64 (2.92%), that's below the last trading month's daily average range of $2.71. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for LW. Prices continued to consolidate within a tight trading range between 54.03 and 57.42 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and one bearish pattern, the Bearish Hikkake Pattern. The last time a Bullish Short Candle showed up on April 16th, LW gained 4.12% on the following trading day.
Lamb Weston managed to close back above the 50-day moving average at 56.16 for the first time since May 8th. Prices are trading close to the key technical resistance level at 57.42 (R1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 57.42 where further buy stops could get activated. Selling might speed up should prices move below the nearby swing low at 54.04 where further sell stops could get triggered. As prices are trading close to May's high at 62.01, upside momentum might accelerate should the share mark new highs for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) above 80" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Lamb Weston. Out of 101 times, LW closed higher 60.40% 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 64.36% with an average market move of 1.07%.