LYB closes above its opening price after recovering from early selling pressure
LyondellBasell Industries NV Class A (LYB) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
LYB finished the week 12.72% higher at 60.42 after edging higher $0.16 (0.27%) today on low volume, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 60.42 marks the highest recorded closing price since March 6th. Trading up to $0.77 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (LYB as at May 22, 2020):
Friday's trading range has been $1.48 (2.47%), that's far below the last trading month's daily average range of $2.52. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for LYB. Prices continued to consolidate within a tight trading range between 59.12 and 61.31 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern.
LyondellBasell found buyers again today around 59.12 for the third trading day in a row after having found demand at 59.51 in the previous session and at 59.30 two days ago. The last time this happened on March 31st, LYB actually lost -9.27% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 61.31 where further buy stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for LyondellBasell. Out of 65 times, LYB closed higher 58.46% 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 60.00% with an average market move of 0.81%.