SWK dominated by bears dragging the market lower throughout the day
Stanley Black & Decker Inc. (SWK) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SWK finished the week 12.66% higher at 121.49 after losing $2.03 (-1.64%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 122.99, the share confirmed its breakout through the prior session low after trading up to $2.12 below it intraday.
Daily Candlestick Chart (SWK as at May 22, 2020):
Friday's trading range has been $3.49 (2.81%), that's far below the last trading month's daily average range of $5.22. 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 SWK.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Unable to break through the key technical resistance level at 124.01 (R1), the market closed below it after spiking up to 124.36 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on May 15th, SWK actually gained 11.89% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 128.04 where further buy stops might get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Stanley Black. Out of 748 times, SWK closed higher 55.08% 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 58.56% with an average market move of 0.59%.