PPG runs into sellers around 131.00 for the third day in a row
PPG Industries Inc. (PPG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PPG ended Wednesday at 129.04 losing $0.88 (-0.68%), slightly underperforming the S&P 500 (-0.46%). Trading $0.94 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (PPG as at Sep 16, 2020):
Wednesday's trading range has been $2.01 (1.55%), that's slightly below the last trading month's daily average range of $2.49. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for PPG. Prices continued to consolidate within a tight trading range between 127.64 and 131.09 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical resistance level at 131.09 (R1). The market ran into sellers again today around 131.00 for the third trading day in a row after having found sellers at 131.09 in the previous session and at 131.05 two days ago. The last time this happened on August 4th, PPG actually gained 3.59% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 123.15.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 131.09 where further buy stops might get activated. With prices trading close to this year's high at 134.16, upside momentum could accelerate should the stock be able to break out to new highs for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for PPG. Out of 444 times, PPG closed higher 55.18% 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 59.91% with an average market move of 1.05%.