O breaks below Tuesday's low
Realty Income Corporation (O) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
O finished Wednesday at 65.41 losing $0.40 (-0.61%), slightly underperforming the S&P 500 (-0.46%). Trading $0.50 higher after the open, Realty Income was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Tuesday's low at 65.51, the share confirmed its breakout through the prior session low after trading up to $0.15 below it intraday.
Daily Candlestick Chart (O as at Sep 16, 2020):
Wednesday's trading range has been $1.20 (1.82%), that's below the last trading month's daily average range of $1.50. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for O.
In spite of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on July 6th, O lost -2.80% on the following trading day. 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.
Prices are trading close to the key technical support level at 65.29 (S1). After having been unable to move lower than 65.51 in the prior session, the stock found buyers again around the same price level today at 65.36.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 66.80 where further buy stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Realty Income. Out of 337 times, O closed higher 57.86% 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 56.68% with an average market move of 0.43%.