BJ unable to break through key resistance level
BJ's Wholesale Club Holdings Inc. (BJ) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, BJ ended the week -6.13% lower at 25.57 after losing $0.20 (-0.78%) today, slightly underperforming the S&P 500 (-0.58%). Today's close at 25.57 marks the lowest recorded closing price since March 15th. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (BJ as at May 17, 2019):
Friday's trading range has been $0.63 (2.46%), that's slightly below the last trading month's daily average range of $0.82. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently just the same than usual for BJ.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, six candlestick patterns are matching today's price action, the Bullish Doji Star, the Bullish Harami Cross Pattern, the Inverted Hammer and the Southern Doji which are known as bullish patterns, one bearish pattern, the Gravestone Doji and one neutral pattern, the Doji. The last time a Inverted Hammer showed up on October 25, 2018, BJ actually lost -3.22% on the following trading day.
Prices are trading close to the key technical support level at 25.39 (S1). Unable to break through the key technical resistance level at 26.03 (R1), BJ's Wholesale closed below it after spiking up to 26.20 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 25.56 in the prior session, the market found buyers again around the same price level today at 25.57.
While the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the close-by swing low at 25.56 where further sell stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Gravestone Doji" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for BJ's Wholesale. Out of 6 times, BJ closed higher 66.67% 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 83.33% with an average market move of 7.82%.