SWK finds support at 20-day moving average
Stanley Black & Decker Inc. (SWK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SWK finished the month 10.0% higher at 153.32 after losing $1.14 (-0.74%) today, notably underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (SWK as at Jul 31, 2020):
Friday's trading range has been $5.57 (3.62%), that's far above the last trading month's daily average range of $3.91. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SWK.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on July 24th, SWK actually gained 3.07% on the following trading day.
After trading as low as 148.88 during the day, the share found support at the 20-day moving average at 149.01. Unable to break through the key technical resistance level at 154.42 (R1), the market closed below it after spiking up to 154.45 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
Although Stanley Black is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 157.14 where further buy stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Stanley Black. Out of 746 times, SWK closed higher 55.50% 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 58.98% with an average market move of 0.69%.