OLN still stuck within tight trading range
Olin Corporation (OLN) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, OLN finished Wednesday at 11.70 gaining $0.15 (1.3%) on low volume, significantly outperforming the S&P 500 (-0.46%). Trading up to $0.25 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on September 8th, OLN actually lost -3.62% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (OLN as at Sep 16, 2020):
Wednesday's trading range has been $0.55 (4.74%), that's slightly above the last trading month's daily average range of $0.54. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for OLN. Prices continued to consolidate within a tight trading range between 11.12 and 11.91 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns.
Unable to break through the key technical resistance level at 11.71 (R1), Olin closed below it after spiking up to 11.91 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 11.37 in the prior session, the market found buyers again around the same price level today at 11.36.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the close-by swing high at 12.03 where further buy stops might get activated. Trading close to July's high at 12.64 we could see further upside momentum if potential buy stops at the level get triggered. As prices are trading close to September's low at 10.99, downside momentum might accelerate should OLN mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish High-Wave Candle" stand out. Its common bullish interpretation has been confirmed for Olin. Out of 27 times, OLN closed higher 55.56% of the time on the next trading day after the market condition occurred.