ROK finds buyers at key support level
Rockwell Automation Inc. (ROK) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, ROK finished Wednesday at 225.28 gaining $0.51 (0.23%), outperforming the S&P 500 (-0.46%). Trading $2.28 higher after the open, the market 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 missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (ROK as at Sep 16, 2020):
Wednesday's trading range has been $4.44 (1.96%), that's slightly below the last trading month's daily average range of $4.80. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ROK.
After trading down to 224.79 earlier during the day, Rockwell Automation bounced off the key technical support level at 225.12 (S1). The failure to close below the support might increase that levels importance as support going forward. After spiking up to 229.23 during the day, the share found resistance at the 20-day moving average at 228.20. The last time this happened on June 30th, ROK lost -1.17% on the following trading day. After having been unable to move lower than 224.63 in the prior session, the stock found buyers again around the same price level today at 224.79.
While ROK is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Further selling might move prices lower should the market test August's close-by low at 217.70.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Rockwell Automation. Out of 404 times, ROK closed higher 60.64% 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 52.97% with an average market move of 0.57%.