CHKP rises to highest close since February 21st
Check Point Software Technologies Ltd. (CHKP) Technical Analysis Report for Jul 08, 2020 | by Techniquant Editorial Team
Moving higher for the 7th day in a row, CHKP finished Wednesday at 115.94 gaining $0.06 (0.05%) on high volume, strongly underperforming the Nasdaq 100 (1.36%). Today's close at 115.94 marks the highest recorded closing price since February 21st. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CHKP as at Jul 08, 2020):
Wednesday's trading range has been $3.79 (3.25%), that's above the last trading month's daily average range of $2.75. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for CHKP.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns. The last time a Bearish High-Wave Candle showed up on March 9th, CHKP actually gained 1.05% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 108.23.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
With prices trading close to this year's high at 119.67, upside momentum might speed up should the stock be able to break out to new highs for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish High-Wave Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Check Point. Out of 32 times, CHKP closed higher 59.38% 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 75.00% with an average market move of 1.24%.