ADBE breaks back below 200-day moving average
Adobe Inc. (ADBE) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
ADBE ended the week 3.55% higher at 305.83 after losing $16.84 (-5.22%) today on low volume, strongly underperforming the Nasdaq 100 (-3.91%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (ADBE as at Mar 27, 2020):
Friday's trading range has been $13.46 (4.32%), that's far below the last trading month's daily average range of $23.90. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for ADBE. Prices continued to consolidate within a tight trading range between 287.78 and 326.99 where it has been caught now for the whole last trading week.
After trading down to 300.83 earlier during the day, the market bounced off the key technical support level at 301.00 (S1). The failure to close below the support might increase that levels significance as support going forward. The stock closed back below the 200-day moving average at 307.72. When this moving average was crossed below the last time on Wednesday, ADBE actually gained 5.48% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could speed up should prices move above the nearby swing high at 324.43 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 298.13 where further sell stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Adobe. Out of 31 times, ADBE closed higher 64.52% 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 64.52% with an average market move of 2.67%.