NOC breaks back below 20-day moving average
Northrop Grumman Corporation (NOC) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NOC ended the week 1.33% higher at 325.91 after losing $2.20 (-0.67%) today, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (NOC as at May 22, 2020):
Friday's trading range has been $5.51 (1.68%), that's below the last trading month's daily average range of $9.23. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NOC.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on Wednesday, NOC actually gained 2.41% on the following trading day.
The share closed back below the 20-day moving average at 327.28. After having been unable to move above 329.53 in the prior session, Northrop Grumman ran into sellers again around the same price level today, failing to move higher than 328.95.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the close-by swing high at 335.19 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 319.71 where further sell stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Northrop Grumman. Out of 144 times, NOC closed higher 58.33% 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 62.50% with an average market move of 1.27%.