TEX loses $0.75 (-3.83%) after posting strong earnings
Terex Corporation (TEX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, TEX ended the month 0.43% higher at 18.85 after losing $0.75 (-3.83%) today on high volume, significantly underperforming the S&P 500 (0.77%) following Thursday's earnings report. Closing below Thursday's low at 19.16, the market confirmed its breakout through the previous session low after trading up to $1.16 below it intraday.
Daily Candlestick Chart (TEX as at Jul 31, 2020):
TEX reported earnings of $-0.05 per share after Thursday's market close. With analysts having expected an EPS of $-0.56, Terex Corporation beat market expectations by 91.1%. The company's last earnings report was released on April 30, 2020, when Terex Corporation reported earnings of $-0.35 per share missing market expectations by -1,066.7%.
Friday's trading range has been $2.25 (11.17%), that's far above the last trading month's daily average range of $0.87. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TEX.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
After trading as low as 18.00 during the day, Terex found support at the 50-day moving average at 18.57. The last time this happened on May 22nd, TEX gained 10.88% on the following trading day. The share closed below the 20-day moving average at 19.09 for the first time since July 13th.
While the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Terex. Out of 16 times, TEX closed higher 62.50% 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 nine trading days, showing a win rate of 68.75% with an average market move of 1.26%.