OMC crashes, losing $1.39 (-1.75%) within a single day on low volume
Omnicom Group Inc. (OMC) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
OMC ended the week 3.17% higher at 78.14 after tanking $1.39 (-1.75%) today on low volume, notably underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. This is the biggest single-day loss in over three months. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 78.53, the market confirmed its breakout through the prior session low after trading up to $0.96 below it intraday.
Daily Candlestick Chart (OMC as at Feb 14, 2020):
Friday's trading range has been $2.18 (2.73%), that's far above the last trading month's daily average range of $1.48. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for OMC.
In spite of a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on Tuesday, OMC actually gained 2.03% on the following trading day.
Prices are trading close to the key technical support level at 77.07 (S1). The stock closed back below the 200-day moving average at 78.90. After having been unable to move above 80.02 in the prior session, Omnicom Group ran into sellers again around the same price level today, failing to move higher than 79.75.
OMC shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Omnicom Group. Out of 13 times, OMC closed higher 61.54% 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 53.85% with an average market move of 0.51%.