TMK finds buyers at key support level
Torchmark Corp. (TMK) Technical Analysis Report for Oct 12, 2018
TMK ended the week -3.94% lower at 83.98 after gaining $0.40 (0.48%) today on high volume, underperforming the S&P 500 (1.42%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (TMK as at Oct 12, 2018):
Friday's trading range has been $2.36 (2.8%), that's far above the last trading month's daily average range of $1.48. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TMK.
One bullish candlestick pattern matches today's price action, the Takuri Line.
After trading down to 82.29 earlier during the day, the stock bounced off the key technical support level at 82.76 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on October 5th, TMK gained 1.46% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 86.98.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Further selling could move prices lower should the market test September's nearby low at 81.80.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Torchmark Corp.. Out of 111 times, TMK closed higher 59.46% 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 63.96% with an average market move of 0.53%.