WY finds buyers again around 28.39
Weyerhaeuser Company (WY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
WY ended Wednesday at 28.93 gaining $0.17 (0.59%), significantly outperforming the S&P 500 (-0.46%). Trading up to $0.53 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 previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (WY as at Sep 16, 2020):
Wednesday's trading range has been $0.83 (2.87%), that's slightly above the last trading month's daily average range of $0.77. 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 slightly lower than usual for WY. Prices continued to consolidate within a tight trading range between 28.17 and 29.24 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, three candlestick patterns are matching today's price action, the Doji, the Long-Legged Doji and the Rickshaw-Man which are known as neutral patterns. The last time a Rickshaw-Man showed up on December 3, 2018, WY lost -5.21% on the following trading day.
After trading down to 28.39 earlier during the day, Weyerhaeuser bounced off the key technical support level at 28.50 (S1). The failure to close below the support might increase that levels importance as support going forward. After having been unable to move lower than 28.51 in the previous session, the share found buyers again around the same price level today at 28.39.
Though the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 29.24 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 28.17 where further sell stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Weyerhaeuser. Out of 432 times, WY closed higher 56.71% 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 55.09% with an average market move of 0.56%.