CHH finds buyers again around 97.40
Choice Hotels International Inc. (CHH) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CHH ended Wednesday at 98.73 gaining $0.64 (0.65%) on high volume, significantly outperforming the S&P 500 (-0.46%). Trading $0.77 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CHH as at Sep 16, 2020):
Wednesday's trading range has been $2.15 (2.18%), that's below the last trading month's daily average range of $2.44. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CHH. Prices continued to consolidate within a tight trading range between 96.60 and 99.77 where it has been caught now for the last three trading days.
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, two candlestick patterns are matching today's price action, the Northern Doji which is known as bearish pattern and one neutral pattern, the Doji.
Unable to break through the key technical resistance level at 99.18 (R1), the stock closed below it after spiking up to 99.55 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 97.27 in the prior session, Choice Hotels found buyers again around the same price level today at 97.40. The last time this happened on September 4th, CHH actually lost -3.77% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 99.77 where further buy stops could get activated. As prices are trading close to September's high at 101.69, upside momentum might accelerate should the share mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Choice Hotels. Out of 77 times, CHH closed higher 58.44% 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 64.94% with an average market move of 1.39%.