VMI still stuck within tight trading range
Valmont Industries Inc. (VMI) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
VMI finished Thursday at 98.94 gaining $7.51 (8.21%), significantly outperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 96.65, the share confirmed its breakout through the prior session high after trading up to $2.46 above it intraday.
Daily Candlestick Chart (VMI as at Mar 26, 2020):
Thursday's trading range has been $8.82 (9.61%), that's above the last trading month's daily average range of $6.70. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for VMI. Prices continued to consolidate within a tight trading range between 87.84 and 99.28 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical resistance level at 99.52 (R1). After having been unable to move lower than 90.96 in the previous session, the market found buyers again around the same price level today at 90.29. The last time this happened on Monday, VMI gained 4.00% on the following trading day.
Although the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 99.28 where further buy stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed above last periods high" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Valmont. Out of 421 times, VMI closed lower 54.39% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 51.78% with an average market move of -0.24%.