BBY runs into sellers around 109.13 for the forth day in a row
Best Buy Co. Inc. (BBY) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
BBY finished Wednesday at 107.08 losing $0.88 (-0.82%), slightly underperforming the S&P 500 (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 107.42, Best Buy confirmed its breakout through the previous session low after trading up to $0.62 below it intraday.
Daily Candlestick Chart (BBY as at Sep 16, 2020):
Wednesday's trading range has been $2.33 (2.14%), that's below the last trading month's daily average range of $3.25. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BBY.
One bearish candlestick pattern matches today's price action, the Black Candle.
The share was sold again around 109.13 after having seen highs at 109.39, 109.13 and 109.07 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on June 19th, BBY actually gained 4.41% on the following trading day.
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 109.39 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 106.17 where further sell stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Best Buy. Out of 423 times, BBY closed higher 55.32% 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 58.63% with an average market move of 1.38%.