RL closes within prior day's range
Ralph Lauren Corporation (RL) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
RL ended the week 11.41% higher at 72.84 after losing $1.73 (-2.32%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (RL as at May 22, 2020):
Friday's trading range has been $3.97 (5.28%), that's slightly above the last trading month's daily average range of $3.64. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for RL.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on May 12th, RL lost -1.28% on the following trading day.
While 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 three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Ralph Lauren. Out of 528 times, RL closed higher 52.84% 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 52.65% with an average market move of 0.46%.