TXT closes within previous day's range after lackluster session
Textron Inc. (TXT) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
TXT finished the month 6.26% higher at 32.91 after losing $0.46 (-1.38%) today, notably underperforming the S&P 500 (1.54%). Trading $0.40 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. 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 (TXT as at Jun 30, 2020):
Tuesday's trading range has been $0.87 (2.64%), that's far below the last trading month's daily average range of $1.65. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for TXT. Prices continued to consolidate within a tight trading range between 31.29 and 33.61 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 bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical resistance level at 33.83 (R1). After having been unable to move above 33.61 in the prior session, the stock ran into sellers again around the same price level today, missing to move higher than 33.41. The last time this happened on June 25th, TXT lost -3.45% on the following trading day.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 33.61 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 31.29 where further sell stops might get activated. As prices are trading close to June's low at 30.73, downside momentum could accelerate should Textron mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Textron. Out of 230 times, TXT closed higher 55.65% 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 54.35% with an average market move of 1.48%.