CHKP loses $1.34 (-1.08%) after posting strong earnings
Check Point Software Technologies Ltd. (CHKP) Technical Analysis Report for Jul 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CHKP ended Wednesday at 123.02 losing $1.34 (-1.08%) on high volume, strongly underperforming the Nasdaq 100 (0.35%) following today's earnings report. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 123.72, Check Point confirmed its breakout through the prior session low after trading up to $1.80 below it intraday.
Daily Candlestick Chart (CHKP as at Jul 22, 2020):
CHKP reported earnings of $1.58 per share before today's market open. With analysts having expected an EPS of $1.42, Check Point Software Technologies Ltd. beat market expectations by 11.3%. The company's last earnings report was released on April 27, 2020, when Check Point Software Technologies Ltd. reported earnings of $1.42 per share topping market expectations by 2.2%.
Wednesday's trading range has been $8.73 (6.73%), that's far above the last trading month's daily average range of $3.31. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for CHKP.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on July 13th, CHKP actually gained 1.50% on the following trading day. In spite of a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Check Point. Out of 461 times, CHKP closed higher 55.75% 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 60.52% with an average market move of 0.86%.