TDG unable to break through key resistance level
Transdigm Group Incorporated Inc. (TDG) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
TDG finished the month 4.06% higher at 442.05 after edging lower $1.71 (-0.39%) today on low volume, significantly underperforming the S&P 500 (1.54%). Trading up to $7.58 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (TDG as at Jun 30, 2020):
Tuesday's trading range has been $15.12 (3.45%), that's below the last trading month's daily average range of $24.45. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for TDG.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on May 15th, TDG gained 14.01% on the following trading day.
Unable to break through the key technical resistance level at 446.15 (R1), the stock closed below it after spiking up to 446.17 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move above 443.76 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 446.17.
Transdigm Group shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to June's low at 413.13, downside momentum might speed up should TDG mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Transdigm Group. Out of 610 times, TDG closed higher 55.74% 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 64.75% with an average market move of 1.49%.