SXT closes higher for the 3rd day in a row
Sensient Technologies Corporation (SXT) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, SXT ended the week 5.16% higher at 46.25 after edging higher $0.09 (0.19%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.47 lower after the open, Sensient Technologies managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SXT as at May 22, 2020):
Friday's trading range has been $0.61 (1.32%), that's far below the last trading month's daily average range of $1.52. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SXT. Prices continued to consolidate within a tight trading range between 44.52 and 46.68 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man.
Prices are trading close to the key technical support level at 45.63 (S1). The stock ran into sellers again today around 46.31 for the third trading day in a row after having found sellers at 46.52 in the previous session and at 46.41 two days ago. The last time this happened on April 14th, SXT lost -2.82% 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 speed up should prices move above the close-by swing high at 46.52 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 44.52 where further sell stops might get triggered. As prices are trading close to May's high at 47.85, upside momentum could speed up should the market mark new highs for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Sensient Technologies. Out of 92 times, SXT closed higher 59.78% 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 54.35% with an average market move of 0.17%.