NEU pushes through key technical resistance level
NewMarket Corp (NEU) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NEU finished the month -8.17% lower at 400.48 after gaining $3.53 (0.89%) today, underperforming the S&P 500 (1.54%). Closing above Monday's high at 398.80, NewMarket confirmed its breakout through the previous session high after trading up to $2.71 above it intraday.
Daily Candlestick Chart (NEU as at Jun 30, 2020):
Tuesday's trading range has been $6.99 (1.77%), that's below the last trading month's daily average range of $12.87. 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 NEU.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a Bullish Short Candle showed up on June 22nd, NEU actually lost -3.65% on the following trading day.
Buyers managed to take out the key technical resistance level at 397.98 (now S1), which is likely to act as support going forward.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to June's low at 385.18, downside momentum could speed up should the share mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for NewMarket. Out of 70 times, NEU closed lower 55.71% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 51.43% with an average market move of 0.01%.