ROK closes below its opening price unable to hold early session gains
Rockwell Automation Inc. (ROK) Technical Analysis Report for Jul 24, 2020 | by Techniquant Editorial Team
ROK ended the week 0.4% higher at 226.19 after edging higher $0.20 (0.09%) today on low volume, outperforming the S&P 500 (-0.62%). Trading $1.02 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 prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (ROK as at Jul 24, 2020):
Friday's trading range has been $2.50 (1.1%), that's far below the last trading month's daily average range of $4.18. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ROK. Prices continued to consolidate within a tight trading range between 224.87 and 228.20 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical resistance level at 228.20 (R1). The stock found buyers again today around 225.12 for the third trading day in a row after having found demand at 225.13 in the prior session and at 224.87 two days ago. The last time this happened on June 26th, ROK gained 1.66% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 228.20 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 221.42 where further sell stops might get triggered. With prices trading close to this year's high at 230.71, upside momentum could accelerate should the market be able to break out to new highs for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous two Lows" stand out. Its common bullish interpretation has been confirmed for Rockwell Automation. Out of 132 times, ROK closed higher 58.33% 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 57.58% with an average market move of 0.87%.