ROK closes lower for the 2nd day in a row
Rockwell Automation Inc. (ROK) Technical Analysis Report for Jul 29, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ROK ended Wednesday at 220.97 losing $1.31 (-0.59%) on high volume, significantly underperforming the S&P 500 (1.24%). 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 29, 2020):
Wednesday's trading range has been $5.42 (2.42%), that's above the last trading month's daily average range of $4.46. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ROK.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on June 23rd, ROK actually lost -1.75% on the following trading day.
Prices are trading close to the key technical resistance level at 225.12 (R1).
Though the stock 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 accelerate should prices move below the nearby swing low at 217.21 where further sell stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Rockwell Automation. Out of 42 times, ROK closed higher 61.90% 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 66.67% with an average market move of 1.84%.