BUD stuck within tight trading range
Anheuser-Busch Inbev SA Sponsored ADR (BUD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, BUD ended Thursday at 46.30 gaining $0.71 (1.56%), significantly underperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (BUD as at Mar 26, 2020):
Thursday's trading range has been $2.70 (6.09%), that's slightly below the last trading month's daily average range of $2.96. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for BUD. Prices continued to consolidate within a tight trading range between 42.99 and 47.00 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After having been unable to move above 47.00 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 46.99. The last time this happened on Monday, BUD actually gained 5.10% on the following trading day.
While the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the close-by swing high at 47.00 where further buy stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "6 Consecutive Higher Closes" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Anheuser-Busch Inbev. Out of 13 times, BUD closed lower 53.85% 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 84.62% with an average market move of -2.63%.