ROK finds support at 20-day moving average
Rockwell Automation Inc. (ROK) Technical Analysis Report for Jul 09, 2020 | by Techniquant Editorial Team
ROK finished Thursday at 211.37 losing $0.91 (-0.43%), but still slightly outperforming the S&P 500 (-0.56%). Trading $2.88 higher after the open, Rockwell Automation was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ROK as at Jul 09, 2020):
Thursday's trading range has been $5.43 (2.56%), that's slightly below the last trading month's daily average range of $5.74. 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. Prices continued to consolidate within a tight trading range between 209.45 and 214.88 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
After trading as low as 209.45 during the day, the market found support at the 20-day moving average at 209.99. The last time this happened on February 24th, ROK actually lost -2.90% on the following trading day. Unable to break through the key technical resistance level at 213.24 (R1), the share closed below it after spiking up to 214.88 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 215.71 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Rockwell Automation. Out of 421 times, ROK closed higher 56.77% 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 52.73% with an average market move of 0.40%.