URI closes above its opening price after recovering from early selling pressure
United Rentals Inc. (URI) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
URI finished the week 6.65% higher at 117.45 after losing $1.33 (-1.12%) today on low volume, significantly underperforming the S&P 500 (-0.01%). Trading up to $2.04 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (URI as at Jan 11, 2019):
Friday's trading range has been $3.52 (3.0%), that's far below the last trading month's daily average range of $5.38. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for URI. Prices continued to consolidate within a tight trading range between 114.85 and 119.94 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and one neutral pattern, the Doji.
After trading down to 115.33 earlier during the day, the market bounced off the key technical support level at 115.74 (S1). The failure to close below the support might increase that levels importance as support going forward. United Rentals found buyers again today around 115.33 for the third trading day in a row after having found demand at 115.60 in the prior session and at 114.85 two days ago. The last time this happened on October 16, 2018, URI actually lost -1.54% on the following trading day.
Though 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 nearby swing high at 119.94 where further buy stops might get activated. Further buying could move prices higher should the market test December's close-by high at 124.23.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for United Rentals. Out of 71 times, URI closed higher 57.75% 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 61.97% with an average market move of 3.21%.