ROK breaks above 20-day moving average for the first time since February 24th
Rockwell Automation Inc. (ROK) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, ROK finished Thursday at 159.29 gaining $4.73 (3.06%), significantly underperforming the S&P 500 (6.24%). Trading up to $7.77 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on March 19th, ROK actually lost -6.14% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (ROK as at Mar 26, 2020):
Thursday's trading range has been $9.16 (5.8%), that's below the last trading month's daily average range of $13.13. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for ROK.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man.
The stock managed to close above the 20-day moving average at 159.24 for the first time since February 24th. Prices are trading close to the key technical resistance level at 166.35 (R1). After having been unable to move above 159.99 in the prior session, Rockwell Automation ran into sellers again around the same price level today, failing to move higher than 159.37.
Although the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 159.99 where further buy stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Rockwell Automation. Out of 557 times, ROK closed higher 50.45% 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 55.66% with an average market move of 0.58%.