RCL closes below its opening price unable to hold early session gains
Royal Caribbean Cruises Ltd. (RCL) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
RCL ended Thursday at 40.61 losing $1.80 (-4.24%) on high volume, strongly underperforming the S&P 500 (6.24%). Trading $7.04 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Tuesday, RCL actually gained 23.03% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (RCL as at Mar 26, 2020):
Thursday's trading range has been $12.02 (28.06%), that's far above the last trading month's daily average range of $7.96. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for RCL.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns.
After spiking up to 49.87 during the day, Royal Caribbean found resistance at the 20-day moving average at 46.40.
Although the stock is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
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. Though it is usually interpreted as bearish, it has actually shown to be bullish for Royal Caribbean. Out of 207 times, RCL closed higher 54.59% 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 61.35% with an average market move of 1.34%.