BFAM closes lower for the 2nd day in a row
Bright Horizons Family Solutions Inc. (BFAM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BFAM finished the month -8.5% lower at 107.24 after losing $2.26 (-2.06%) today, strongly underperforming the S&P 500 (0.77%). Today's close at 107.24 marks the lowest recorded closing price since July 9th. Closing below Thursday's low at 108.45, the share confirmed its breakout through the previous session low after trading up to $2.59 below it intraday.
Daily Candlestick Chart (BFAM as at Jul 31, 2020):
Friday's trading range has been $4.56 (4.16%), that's above the last trading month's daily average range of $3.83. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BFAM.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern. The last time a Last Engulfing Bottom Pattern showed up on July 9th, BFAM gained 2.72% on the following trading day.
Prices broke below the key technical support level at 109.44 (now R1), which is likely to act as resistance going forward. After having been unable to move above 110.34 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 110.42.
Bright Horizons shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Bright Horizons. Out of 33 times, BFAM closed higher 51.52% 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 75.76% with an average market move of 1.87%.