WM finds buyers at key support level
Waste Management Inc. (WM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, WM ended the week 3.12% higher at 98.92 after edging lower $0.01 (-0.01%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.75 lower after the open, the stock 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 (WM as at May 22, 2020):
Friday's trading range has been $0.87 (0.88%), that's far below the last trading month's daily average range of $2.51. 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 WM. Prices continued to consolidate within a tight trading range between 98.09 and 100.56 where it has been caught now for the whole last trading week.
Four candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern, two bearish patterns, the Hanging Man and the Northern Doji and one neutral pattern, the Doji. The last time a Doji showed up on April 30th, WM lost -1.81% on the following trading day.
After trading down to 98.13 earlier during the day, Waste Management bounced off the key technical support level at 98.35 (S1). The failure to close below the support might increase that levels significance as support going forward.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the close-by swing high at 100.56 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 98.09 where further sell stops might get activated. Further buying could move prices higher should the market test April's close-by high at 103.19.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Waste Management. Out of 86 times, WM closed higher 65.12% 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 62.79% with an average market move of 0.51%.