BF-B finds buyers at key support level
Brown Forman Inc Class B (BF-B) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
Moving higher for the 5th day in a row, BF-B ended Wednesday at 48.57 gaining $0.23 (0.48%), slightly outperforming the S&P 500 (0.3%). Today's close at 48.57 marks the highest recorded closing price since December 3, 2018. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (BF-B as at Feb 13, 2019):
Wednesday's trading range has been $0.51 (1.05%), that's below the last trading month's daily average range of $0.72. 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 BF-B.
Three candlestick patterns are matching today's price action, the Gravestone Doji and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji. The last time a Gravestone Doji showed up on November 2, 2018, BF-B actually gained 1.31% on the following trading day.
After trading down to 48.39 earlier during the day, the share bounced off the key technical support level at 48.50 (S1). The failure to close below the support might increase that levels importance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 47.95 where further sell stops might get activated. Trading close to December's high at 49.32 we could see further upside momentum if potential buy stops at the level get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Gravestone Doji" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Brown Forman. Out of 35 times, BF-B closed higher 54.29% 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 62.86% with an average market move of 1.08%.