SHW closes below its opening price unable to hold early session gains
Sherwin-Williams Company (SHW) Technical Analysis Report for Aug 05, 2020 | by Techniquant Editorial Team
SHW finished Wednesday at 650.73 edging lower $0.18 (-0.03%), underperforming the S&P 500 (0.64%). Trading $5.80 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, SHW actually gained 1.52% on the following trading day. 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 (SHW as at Aug 05, 2020):
Wednesday's trading range has been $8.17 (1.25%), that's below the last trading month's daily average range of $13.18. 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 SHW. Prices continued to consolidate within a tight trading range between 639.27 and 658.90 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 640.88 (S1). After having been unable to move above 657.85 in the previous session, the stock ran into sellers again around the same price level today, failing to move higher than 658.90.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 659.87 where further buy stops could get activated. Selling might speed up should prices move below the nearby swing low at 640.88 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Sherwin-Williams. Out of 500 times, SHW closed higher 53.60% 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 65.00% with an average market move of 1.54%.