ORLY unable to break through key resistance level
O'Reilly Automotive Inc. (ORLY) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
ORLY ended the month 1.06% higher at 421.67 after edging lower $0.72 (-0.17%) today, strongly underperforming the Nasdaq 100 (1.96%). Trading up to $4.48 lower after the open, the market 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.
Daily Candlestick Chart (ORLY as at Jun 30, 2020):
Tuesday's trading range has been $9.23 (2.2%), that's slightly below the last trading month's daily average range of $10.31. 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 ORLY. Prices continued to consolidate within a tight trading range between 411.78 and 424.51 where it has been caught now for the last three trading days.
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 Bearish Hikkake Pattern showed up on June 3rd, ORLY lost -1.69% on the following trading day.
Unable to break through the key technical resistance level at 424.43 (R1), the stock closed below it after spiking up to 424.51 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. The share ran into sellers again today around 424.51 for the third trading day in a row after having found sellers at 422.75 in the previous session and at 424.43 two days ago.
Although O'Reilly Automotive is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for O'Reilly Automotive. Out of 146 times, ORLY closed higher 53.42% 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 61.64% with an average market move of 0.88%.