BF-B closes above its opening price after recovering from early selling pressure
Brown Forman Inc Class B (BF-B) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
BF-B finished the month 8.92% higher at 69.34 after edging higher $0.13 (0.19%) today on high volume, underperforming the S&P 500 (0.77%). Today's close at 69.34 marks the highest recorded closing price since February 21st. Trading up to $0.85 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on June 22nd, BF-B actually lost -0.85% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (BF-B as at Jul 31, 2020):
Friday's trading range has been $1.24 (1.8%), that's slightly below the last trading month's daily average range of $1.28. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BF-B. Prices continued to consolidate within a tight trading range between 68.20 and 69.75 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
Buyers managed to take out the key technical resistance level at 69.31 (now S1), which is likely to act as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 69.75 where further buy stops might get triggered. Further buying could move prices higher should the market test June's nearby high at 70.63.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) above 80" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Brown Forman. Out of 292 times, BF-B closed higher 53.77% 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 59.93% with an average market move of 0.71%.