ROK stuck within tight trading range
Rockwell Automation Inc. (ROK) Technical Analysis Report for Jun 26, 2020 | by Techniquant Editorial Team
ROK finished the week -1.85% lower at 205.27 after losing $2.93 (-1.41%) today, but still strongly outperforming the S&P 500 (-2.42%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (ROK as at Jun 26, 2020):
Friday's trading range has been $5.00 (2.41%), that's slightly below the last trading month's daily average range of $5.85. 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 ROK. Prices continued to consolidate within a tight trading range between 202.02 and 209.00 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 202.02 (S1). Rockwell Automation found buyers again today around 202.90 for the third trading day in a row after having found demand at 202.02 in the previous session and at 202.97 two days ago. The last time this happened on Monday, ROK actually lost -0.89% on the following trading day.
Although the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the close-by swing low at 202.02 where further sell stops could get activated. As prices are trading close to June's low at 200.60, downside momentum might accelerate should the stock mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. Its common bullish interpretation has been confirmed for Rockwell Automation. Out of 131 times, ROK closed higher 58.02% 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 56.49% with an average market move of 0.85%.