WLK still stuck within tight trading range
Westlake Chemical Corporation (WLK) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
WLK finished the month 12.47% higher at 53.65 after edging lower $0.42 (-0.78%) today, notably underperforming the S&P 500 (1.54%). Trading up to $0.56 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (WLK as at Jun 30, 2020):
Tuesday's trading range has been $1.43 (2.68%), that's below the last trading month's daily average range of $2.36. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for WLK. Prices continued to consolidate within a tight trading range between 51.76 and 54.53 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on May 26th, WLK gained 5.17% on the following trading day.
Prices are trading close to the key technical resistance level at 54.53 (R1). After having been unable to move lower than 52.82 in the prior session, the stock found buyers again around the same price level today at 52.85.
Westlake Chemical shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the close-by swing high at 54.53 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 51.76 where further sell stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Westlake Chemical. Out of 486 times, WLK closed higher 52.67% 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 58.64% with an average market move of 1.15%.