ADBE dominated by bears dragging the market lower throughout the day
Adobe Inc. (ADBE) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
ADBE ended Wednesday at 476.00 losing $21.67 (-4.35%) on high volume, strongly underperforming the Nasdaq 100 (-1.67%) following Tuesday's earnings report. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 491.49, the market confirmed its breakout through the previous session low after trading up to $15.99 below it intraday.
Daily Candlestick Chart (ADBE as at Sep 16, 2020):
ADBE reported earnings of $2.57 per share after Tuesday's market close. With analysts having expected an EPS of $2.4, Adobe Inc. surpassed market expectations by 7.1%. The company's last earnings report was released on June 11, 2020, when Adobe Inc. reported earnings of $2.45 per share surpassing market expectations by 4.7%.
Wednesday's trading range has been $30.00 (5.93%), that's above the last trading month's daily average range of $19.30. 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 ADBE.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Despite a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 461.18 (S1). Adobe closed back below the 20-day moving average at 492.67. When this moving average was crossed below the last time on September 8th, ADBE actually gained 3.75% on the following trading day.
Although the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the nearby swing low at 464.48 where further sell stops could get triggered.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Adobe. Out of 403 times, ADBE closed higher 59.80% 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 68.24% with an average market move of 1.72%.