RL still stuck within tight trading range
Ralph Lauren Corporation (RL) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
RL ended the month -1.68% lower at 71.30 after gaining $0.22 (0.31%) today on high volume, slightly underperforming the S&P 500 (0.77%). Trading up to $1.11 lower after the open, the market managed to reverse during the session as bulls took control ending the day above 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 (RL as at Jul 31, 2020):
Friday's trading range has been $2.11 (2.98%), that's slightly below the last trading month's daily average range of $2.33. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RL. Prices continued to consolidate within a tight trading range between 69.38 and 72.86 where it has been caught now for the whole last trading week.
In spite of a weak opening the stock managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
The share managed to close back above the 20-day moving average at 71.17. After having been unable to move above 71.54 in the prior session, Ralph Lauren ran into sellers again around the same price level today, failing to move higher than 71.85. The last time this happened on Wednesday, RL lost -2.27% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 72.86 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 69.38 where further sell stops might get triggered. As prices are trading close to July's high at 75.21, upside momentum could accelerate should RL mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for Ralph Lauren. Out of 134 times, RL closed higher 54.48% 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 54.48% with an average market move of 0.61%.