BRK-B dominated by bears dragging the market lower throughout the day
Berkshire Hathaway Inc. (BRK-B) Technical Analysis Report for Jul 27, 2020 | by Techniquant Editorial Team
BRK-B finished Monday at 192.14 losing $2.38 (-1.22%), strongly underperforming the S&P 500 (0.74%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 193.05, the stock confirmed its breakout through the previous session low after trading up to $1.28 below it intraday.
Daily Candlestick Chart (BRK-B as at Jul 27, 2020):
Monday's trading range has been $2.22 (1.15%), that's below the last trading month's daily average range of $2.96. 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 BRK-B.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 192.68 (now R1), which is likely to act as resistance going forward. The last time this happened on June 24th, BRK-B actually gained 0.74% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might accelerate should prices move below the nearby swing low at 189.48 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Berkshire Hathaway. Out of 324 times, BRK-B closed higher 61.11% 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 58.95% with an average market move of 0.60%.