STX unable to break through key resistance level
Seagate Technology PLC (STX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, STX ended the week 6.68% higher at 50.96 after edging lower $0.30 (-0.59%) today on low volume, underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 51.15, the market confirmed its breakout through the prior session low after trading up to $1.09 below it intraday.
Daily Candlestick Chart (STX as at May 22, 2020):
Friday's trading range has been $1.31 (2.56%), that's slightly below the last trading month's daily average range of $1.44. 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 STX.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Hanging Man which are both known as bearish patterns.
Unable to break through the key technical resistance level at 51.21 (R1), the stock closed below it after spiking up to 51.37 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on May 1st, STX lost -2.66% on the following trading day.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the close-by swing high at 52.50 where further buy stops might get activated. Further buying could move prices higher should the market test April's nearby high at 53.27.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Seagate Technology. Out of 67 times, STX closed higher 55.22% 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 56.72% with an average market move of 1.46%.