BBY runs into sellers around 91.14 for the third day in a row
Best Buy Co. Inc. (BBY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BBY ended the week 3.67% higher at 90.21 after edging lower $0.19 (-0.21%) today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. 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 (BBY as at Feb 14, 2020):
Friday's trading range has been $1.28 (1.41%), that's below the last trading month's daily average range of $1.75. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BBY. Prices continued to consolidate within a tight trading range between 89.86 and 91.31 where it has been caught now for the last three trading days.
Even with a strong opening the stock closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on February 7th, BBY actually gained 1.93% on the following trading day.
Prices are trading close to the key technical support level at 89.50 (S1). The market ran into sellers again today around 91.14 for the third trading day in a row after having found sellers at 91.31 in the prior session and at 91.20 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 91.31 where further buy stops might get activated. With prices trading close to this year's high at 91.83, upside momentum could speed up should Best Buy be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Best Buy. Out of 322 times, BBY closed higher 59.01% 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 56.52% with an average market move of 0.98%.