TXN breaks back below 20-day moving average
Texas Instruments Incorporated (TXN) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
TXN ended Wednesday at 139.68 losing $0.96 (-0.68%), but still outperforming the Nasdaq 100 (-1.67%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (TXN as at Sep 16, 2020):
Wednesday's trading range has been $2.52 (1.77%), that's slightly below the last trading month's daily average range of $2.97. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for TXN.
Even with a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The stock closed back below the 20-day moving average at 140.63. When this moving average was crossed below the last time on September 8th, TXN actually gained 2.68% on the following trading day. After having been unable to move lower than 139.36 in the prior session, the share found buyers again around the same price level today at 139.61.
Though Texas Instruments is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Texas Instruments. Out of 86 times, TXN closed higher 59.30% 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 67.44% with an average market move of 1.20%.