TOL closes higher for the 3rd day in a row
Toll Brothers Inc. (TOL) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, TOL ended Thursday at 22.12 gaining $0.42 (1.94%), notably underperforming the S&P 500 (6.24%). Trading up to $0.88 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on March 18th, TOL gained 14.13% on the following trading day. 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 (TOL as at Mar 26, 2020):
Thursday's trading range has been $1.85 (8.41%), that's below the last trading month's daily average range of $2.79. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for TOL.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term. With its 50-day moving average crossing below its 200-day moving average, the stock has entered a so-called "Death Cross" for the first time since March 1, 2019. Showing increasing downward momentum in the short and medium-term the "Death Cross" is known to indicate a potential bear market on the horizon.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Toll Brothers. Out of 159 times, TOL closed lower 56.60% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 53.46% with an average market move of -0.78%.