UAL stuck within tight trading range
United Continental Holdings Inc. (UAL) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
UAL finished the week 27.51% higher at 25.40 after losing $0.44 (-1.7%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (UAL as at May 22, 2020):
Friday's trading range has been $1.91 (7.24%), that's slightly below the last trading month's daily average range of $2.14. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for UAL. Prices continued to consolidate within a tight trading range between 24.30 and 26.58 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Tweezer Top which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on Tuesday, UAL actually gained 5.19% on the following trading day.
After trading down to 24.67 earlier during the day, the stock bounced off the key technical support level at 25.01 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move above 26.58 in the previous session, the share ran into sellers again around the same price level today, missing to move higher than 26.58.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
As prices are trading close to May's high at 29.25, upside momentum could accelerate should United Continental mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for United Continental. Out of 559 times, UAL closed higher 51.34% 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 57.07% with an average market move of 0.78%.