UAL closes above its opening price after recovering from early selling pressure
United Continental Holdings Inc. (UAL) Technical Analysis Report for Aug 05, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, UAL ended Wednesday at 33.73 gaining $1.44 (4.46%), notably outperforming the S&P 500 (0.64%). Trading up to $1.14 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Tuesday's high at 33.70, the stock confirmed its breakout through the prior session high after trading up to $0.87 above it intraday.
Daily Candlestick Chart (UAL as at Aug 05, 2020):
Wednesday's trading range has been $2.40 (7.21%), that's slightly above the last trading month's daily average range of $2.04. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for UAL.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish High-Wave Candle showed up on March 16th, UAL actually lost -13.53% on the following trading day.
The share managed to close back above the 20-day moving average at 32.69 for the first time since July 28th. After having been unable to move lower than 32.01 in the previous session, United Continental found buyers again around the same price level today at 32.17.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for United Continental. Out of 144 times, UAL closed higher 56.25% 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 55.56% with an average market move of 1.06%.