PAYX runs into sellers around 67.74 for the third day in a row
Paychex Inc. (PAYX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
PAYX ended the week 6.54% higher at 67.58 after edging higher $0.18 (0.27%) today on low volume, slightly underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.47 lower after the open, the stock 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 missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (PAYX as at May 22, 2020):
Friday's trading range has been $1.00 (1.49%), that's far below the last trading month's daily average range of $1.99. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PAYX. Prices continued to consolidate within a tight trading range between 64.98 and 68.34 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
Prices are trading close to the key technical resistance level at 68.34 (R1). Paychex ran into sellers again today around 67.74 for the third trading day in a row after having found sellers at 67.83 in the previous session and at 67.91 two days ago. The last time this happened on April 3rd, PAYX actually gained 9.64% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might speed up should prices move above the close-by swing high at 68.34 where further buy stops could get triggered. Further buying might move prices higher should the market test April's nearby high at 70.86.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Its common bullish interpretation has been confirmed for Paychex. Out of 97 times, PAYX closed higher 58.76% 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 58.76% with an average market move of 0.45%.