NEU unable to break through key resistance level

NewMarket Corp (NEU) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team


NEU falls to lowest close since March 25th
NEU unable to break through key resistance level
NEU closes lower for the 2nd day in a row
NEU runs into sellers again around 368.33
NEU breaks below Tuesday's low


Moving lower for the 2nd day in a row, NEU finished Wednesday at 362.05 losing $5.39 (-1.47%), notably underperforming the S&P 500 (-0.46%). Today's close at 362.05 marks the lowest recorded closing price since March 25th. Closing below Tuesday's low at 364.16, the share confirmed its breakout through the prior session low after trading up to $3.33 below it intraday.

Daily Candlestick Chart (NEU as at Sep 16, 2020):

Daily technical analysis candlestick chart for NewMarket Corp (NEU) as at Sep 16, 2020

Wednesday's trading range has been $7.50 (2.05%), that's slightly above the last trading month's daily average range of $7.02. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NEU.

In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on September 1st, NEU actually gained 2.21% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.

Unable to break through the key technical resistance level at 367.70 (R1), the stock closed below it after spiking up to 368.33 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. After having been unable to move above 368.31 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 368.33.

The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.

Buying might accelerate should prices move above the nearby swing high at 370.10 where further buy stops could get activated. Further selling might move prices lower should the market test August's close-by low at 358.47.

Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for NewMarket. Out of 139 times, NEU closed higher 61.15% 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 53.24% with an average market move of 0.78%.

Market Conditions for NEU as at Sep 16, 2020

Loading Market Conditions for NEU (NewMarket Corp)...
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NEU closes within prior day's range

Sep 17, 2020
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