RTO.L closes below its opening price unable to hold early session gains
Rentokil Initial (RTO.L) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, RTO.L finished Wednesday at 351.50 losing £0.50 (-0.14%), underperforming the FTSE 100 (0.81%). Trading £2.10 higher after the open, the share 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 in a lackluster session.
Daily Candlestick Chart (RTO.L as at Feb 13, 2019):
Wednesday's trading range has been £4.00 (1.14%), that's far below the last trading month's daily average range of £7.86. 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 RTO.L.
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, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical resistance level at 356.50 (R1). After having been unable to move lower than 349.90 in the prior session, the market found buyers again around the same price level today at 350.50. The last time this happened on February 7th, RTO.L actually lost -0.54% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 344.40 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Rentokil Initial. Out of 307 times, RTO.L closed higher 52.44% 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 58.63% with an average market move of 1.04%.