CAR declines to lowest close since July 7th
Avis Budget Group Inc. (CAR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, CAR finished the month 13.15% higher at 25.90 after losing $0.64 (-2.41%) today, significantly underperforming the Dow Comp. (0.52%). Today's close at 25.90 marks the lowest recorded closing price since July 7th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CAR as at Jul 31, 2020):
Friday's trading range has been $1.57 (5.91%), that's slightly below the last trading month's daily average range of $1.90. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CAR.
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.
Prices are trading close to the key technical support level at 25.06 (S1). The stock closed below the 200-day moving average at 26.23 for the first time since July 7th. When this moving average was crossed below the last time on July 7th, CAR actually gained 11.57% on the following trading day.
Although the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 24.85 where further sell stops might get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "5 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for Avis Budget. Out of 34 times, CAR closed lower 64.71% 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 70.59% with an average market move of -5.39%.