PKG closes above its opening price after recovering from early selling pressure
Packaging Corporation of America (PKG) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
PKG finished the week 2.28% higher at 92.99 after edging higher $0.08 (0.09%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $1.30 lower after the open, Packaging managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 14th, PKG actually lost -2.59% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (PKG as at May 22, 2020):
Friday's trading range has been $1.66 (1.79%), that's far below the last trading month's daily average range of $3.44. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for PKG. Prices continued to consolidate within a tight trading range between 91.51 and 94.75 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Prices are trading close to the key technical support level at 91.32 (S1).
The share 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 nearby swing high at 94.75 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 90.86 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Spinning Top" stand out. Its common bullish interpretation has been confirmed for Packaging. Out of 238 times, PKG closed higher 53.78% 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 55.88% with an average market move of 0.85%.