ROK pushes through Wednesday's high
Rockwell Automation Inc. (ROK) Technical Analysis Report for Apr 02, 2020 | by Techniquant Editorial Team
ROK finished Thursday at 149.71 gaining $6.03 (4.2%) on low volume, notably outperforming the S&P 500 (2.28%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 145.13, Rockwell Automation confirmed its breakout through the prior session high after trading up to $7.17 above it intraday.
Daily Candlestick Chart (ROK as at Apr 02, 2020):
Thursday's trading range has been $9.83 (6.9%), that's below the last trading month's daily average range of $12.82. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ROK. Prices continued to consolidate within a tight trading range between 140.06 and 156.62 where it has been caught now for the whole last trading week.
Notwithstanding a weak opening the share 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 White Candle.
Buyers managed to take out the key technical resistance level at 145.27 (now S1), which is likely to act as support going forward. The last time this happened on March 25th, ROK gained 3.06% on the following trading day. After spiking up to 152.30 during the day, the market found resistance at the 20-day moving average at 149.96.
Though the stock 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 close-by swing high at 159.99 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 140.06 where further sell 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 "Price broke through Technical Resistance R1" stand out. Its common bullish interpretation has been confirmed for Rockwell Automation. Out of 250 times, ROK closed higher 54.00% 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 60.40% with an average market move of 0.63%.