TDG dominated by bears dragging the market lower throughout the day
Transdigm Group Incorporated Inc. (TDG) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
TDG ended the week 1.92% higher at 646.75 after losing $8.92 (-1.36%) today, notably underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 649.57, the share confirmed its breakout through the prior session low after trading up to $4.63 below it intraday.
Daily Candlestick Chart (TDG as at Feb 14, 2020):
Friday's trading range has been $12.88 (1.96%), that's slightly below the last trading month's daily average range of $14.21. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for TDG.
Notwithstanding a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on February 4th, TDG lost -2.35% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 644.94 during the day, the stock found support at the 20-day moving average at 646.64.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 660.02 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 638.99 where further sell stops might get triggered. With prices trading close to this year's high at 673.51, upside momentum could speed up should Transdigm Group be able to break out to new highs for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Transdigm Group. Out of 679 times, TDG closed higher 56.70% 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 65.39% with an average market move of 1.51%.