SHW rises to highest close since February 20th
Sherwin-Williams Company (SHW) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, SHW ended the week 1.57% higher at 577.30 after gaining $7.30 (1.28%) today on low volume, notably outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 577.30 marks the highest recorded closing price since February 20th. Trading up to $3.75 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (SHW as at May 22, 2020):
Friday's trading range has been $9.39 (1.64%), that's below the last trading month's daily average range of $15.45. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SHW.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Buyers managed to take out the key technical resistance level at 574.86 (now S1), which is likely to act as support going forward. The last time this happened on May 8th, SHW gained 1.67% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 586.12 where further buy stops could get activated. Selling might speed up should prices move below the nearby swing low at 563.00 where further sell stops could get triggered. With prices trading close to this year's high at 599.95, upside momentum might accelerate should the market be able to break out to new highs for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for Sherwin-Williams. Out of 68 times, SHW closed higher 52.94% 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 70.59% with an average market move of 1.35%.