TREX closes higher for the 2nd day in a row
Trex Company Inc. (TREX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, TREX ended the week 1.54% higher at 101.88 after gaining $0.49 (0.48%) today, slightly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $0.63 lower after the open, the stock 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 (TREX as at Feb 14, 2020):
Friday's trading range has been $1.64 (1.61%), that's far below the last trading month's daily average range of $2.19. 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 TREX. Prices continued to consolidate within a tight trading range between 99.63 and 102.88 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on February 6th, TREX actually lost -1.63% on the following trading day.
Prices are trading close to the key technical resistance level at 102.82 (R1). After having been unable to move above 102.88 in the prior session, Trex ran into sellers again around the same price level today, failing to move higher than 102.70.
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 102.88 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 100.07 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Trex. Out of 736 times, TREX closed higher 51.90% 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 58.56% with an average market move of 1.67%.