WAB closes lower for the 2nd day in a row
Westinghouse Air Brake Technologies Corporation (WAB) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, WAB finished the week 8.48% higher at 56.80 after edging lower $0.30 (-0.53%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 56.92, the market confirmed its breakout through the previous session low after trading up to $1.16 below it intraday.
Daily Candlestick Chart (WAB as at May 22, 2020):
Friday's trading range has been $1.25 (2.19%), that's far below the last trading month's daily average range of $2.30. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for WAB.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on April 15th, WAB lost -4.27% on the following trading day.
After trading down to 55.76 earlier during the day, the share bounced off the key technical support level at 56.78 (S1). The failure to close below the support could increase that levels significance as support going forward.
Westinghouse Air shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 58.40 where further buy stops could get triggered. Further buying might move prices higher should the market test April's close-by high at 59.69.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Westinghouse Air. Out of 85 times, WAB closed higher 52.94% 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 62.35% with an average market move of 0.98%.