CHKP still stuck within tight trading range
Check Point Software Technologies Ltd. (CHKP) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CHKP finished the week 2.06% higher at 106.91 after edging higher $0.43 (0.4%) today, slightly outperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. 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 (CHKP as at May 22, 2020):
Friday's trading range has been $1.96 (1.84%), that's below the last trading month's daily average range of $2.69. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHKP. Prices continued to consolidate within a tight trading range between 105.40 and 108.39 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Unable to break through the key technical resistance level at 107.69 (R1), the stock closed below it after spiking up to 108.18 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. The market ran into sellers again today around 108.18 for the third trading day in a row after having found sellers at 108.39 in the previous session and at 108.04 two days ago. The last time this happened on March 3rd, CHKP actually gained 3.48% on the following trading day.
Check Point shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 108.39 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 105.40 where further sell stops could get triggered. Further buying might move prices higher should the market test April's nearby high at 110.98.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Check Point. Out of 695 times, CHKP closed higher 54.10% 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 59.28% with an average market move of 0.68%.