PCAR closes below its opening price unable to hold early session gains
PACCAR Inc. (PCAR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
PCAR finished Wednesday at 86.42 gaining $0.65 (0.76%), strongly outperforming the Nasdaq 100 (-1.67%). Trading $0.52 higher after the open, PACCAR was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (PCAR as at Sep 16, 2020):
Wednesday's trading range has been $1.44 (1.66%), that's slightly below the last trading month's daily average range of $1.74. 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 lower than usual for PCAR.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
The share managed to close back above the 20-day moving average at 86.04. After having been unable to move lower than 85.66 in the previous session, the stock found buyers again around the same price level today at 85.85. The last time this happened on September 9th, PCAR actually lost -2.50% on the following trading day.
Although the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
As prices are trading close to September's high at 89.03, upside momentum could accelerate should PCAR mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Its common bearish interpretation has been confirmed for PACCAR. Out of 207 times, PCAR closed lower 54.11% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after five trading days, showing a win rate of 53.62% with an average market move of -0.03%.