BF-B closes within prior day's range
Brown-Forman Corp. (BF-B) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
BF-B ended the week -6.24% lower at 46.59 after gaining $0.84 (1.84%) today, slightly outperforming the S&P 500 (1.42%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (BF-B as at Oct 12, 2018):
Friday's trading range has been $0.86 (1.86%), that's slightly below the last trading month's daily average range of $1.08. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BF-B.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving lower in the previous session, Brown-Forman Corp. managed to close higher but below the prior day's open, forming a bullish Harami Candle. The last time this candlestick pattern showed up on July 31st, BF-B actually lost -0.53% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 49.43.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 45.63 where further sell stops might get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Brown-Forman Corp.. Out of 120 times, BF-B closed higher 57.50% 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 60.83% with an average market move of 1.47%.