TRN finds buyers at key support level
Trinity Industries Inc. (TRN) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
TRN finished the week 9.29% higher at 19.88 after losing $0.13 (-0.65%) today, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (TRN as at May 22, 2020):
Friday's trading range has been $0.50 (2.5%), that's below the last trading month's daily average range of $0.86. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for TRN. Prices continued to consolidate within a tight trading range between 19.06 and 20.20 where it has been caught now for the whole last trading week.
After moving higher in the previous session, the share closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 19.65 earlier during the day, the stock bounced off the key technical support level at 19.66 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on May 7th, TRN gained 5.79% on the following trading day. The market found buyers again today around 19.65 for the third trading day in a row after having found demand at 19.75 in the previous session and at 19.69 two days ago.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 20.20 where further buy stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Trinity. Out of 384 times, TRN closed higher 61.20% 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 60.94% with an average market move of 1.99%.