O closes within previous day's range after lackluster session
Realty Income Corporation (O) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, O ended the week 4.32% higher at 52.15 after gaining $0.40 (0.77%) today on low volume, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.36 lower after the open, the share 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 failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (O as at May 22, 2020):
Friday's trading range has been $0.87 (1.68%), that's far below the last trading month's daily average range of $1.86. 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 O. Prices continued to consolidate within a tight trading range between 50.82 and 53.04 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern.
The stock managed to close above the 50-day moving average at 51.79 for the first time since March 5th. Prices are trading close to the key technical resistance level at 52.56 (R1). After having been unable to move above 52.32 in the previous session, Realty Income ran into sellers again around the same price level today, failing to move higher than 52.33. The last time this happened on Tuesday, O lost -2.19% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 53.72 where further buy stops could get activated. Selling might speed up should prices move below the nearby swing low at 50.82 where further sell stops could get triggered. As prices are trading close to May's high at 56.09, upside momentum might accelerate should the market mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Realty Income. Out of 128 times, O closed higher 53.13% 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 64.84% with an average market move of 0.58%.