ROK closes lower for the 2nd day in a row
Rockwell Automation Inc. (ROK) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ROK ended the week 2.18% higher at 202.19 after losing $1.54 (-0.76%) today, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 203.31, the market confirmed its breakout through the prior session low after trading up to $2.75 below it intraday.
Daily Candlestick Chart (ROK as at May 22, 2020):
Friday's trading range has been $3.67 (1.8%), that's below the last trading month's daily average range of $6.30. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ROK.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical resistance level at 204.82 (R1).
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the close-by swing high at 209.49 where further buy stops might get triggered. With prices trading close to this year's high at 209.61, upside momentum could speed up should Rockwell Automation be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Rockwell Automation. Out of 309 times, ROK closed higher 55.99% 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 58.25% with an average market move of 1.01%.