BG enters Golden Cross for the first time since February 21st
Bunge Limited (BG) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, BG finished the week 4.32% higher at 47.61 after gaining $0.28 (0.59%) today on high volume, significantly outperforming the S&P 500 (-1.12%). Today's close at 47.61 marks the highest recorded closing price since March 5th. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (BG as at Sep 18, 2020):
Friday's trading range has been $2.14 (4.5%), that's far above the last trading month's daily average range of $1.15. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BG.
Four candlestick patterns are matching today's price action, the Gravestone Doji, the Northern Doji and the Shooting Star which are known as bearish patterns and one neutral pattern, the Doji. The last time a Gravestone Doji showed up on September 1st, BG actually gained 2.07% on the following trading day.
Prices are trading close to the key technical support level at 46.94 (S1).
Crossing above the upper Bollinger Band for the first time since August 10th, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 46.30 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term. With its 50-day moving average crossing above its 200-day moving average, the stock has entered a so-called "Golden Cross" for the first time since February 21st. Showing increasing upward momentum in the short and medium-term the "Golden Cross" is known to indicate a potential bull market on the horizon.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Golden Cross" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Bunge. Out of 9 times, BG closed lower 77.78% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 77.78% with an average market move of -2.26%.