NOC misses to close above 20-day moving average
Northrop Grumman Corporation (NOC) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
NOC finished the week 0.3% higher at 316.24 after gaining $1.42 (0.45%) today on high volume, slightly outperforming the S&P 500 (0.01%). 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 Oct 16, 2020):
Friday's trading range has been $4.17 (1.32%), that's far below the last trading month's daily average range of $7.71. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NOC. Prices continued to consolidate within a tight trading range between 311.40 and 319.73 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern. The last time a Bullish Spinning Top showed up on September 15th, NOC gained 1.61% on the following trading day.
After spiking up to 319.73 during the day, the share found resistance at the 20-day moving average at 319.03.
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 322.47 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 311.40 where further sell stops might get triggered. As prices are trading close to October's low at 307.12, downside momentum could accelerate should Northrop Grumman mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Northrop Grumman. Out of 38 times, NOC closed higher 50.00% 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 68.42% with an average market move of 1.40%.