VMC closes below its opening price unable to hold early session gains
Vulcan Materials Company (VMC) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
VMC finished the week -8.72% lower at 100.99 after gaining $0.62 (0.62%) today on high volume, underperforming the S&P 500 (1.42%). Trading $0.85 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on October 4th, VMC lost -0.77% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (VMC as at Oct 12, 2018):
Friday's trading range has been $2.30 (2.26%), that's slightly below the last trading month's daily average range of $2.46. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for VMC.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Homing Pigeon.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 110.97.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 98.70 where further sell stops could get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Vulcan Materials. Out of 751 times, VMC closed higher 51.26% 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 52.73% with an average market move of 0.68%.