CHKP closes below its opening price unable to hold early session gains
Check Point Software Technologies Ltd. (CHKP) Technical Analysis Report for Jul 24, 2020 | by Techniquant Editorial Team
CHKP finished the week 2.18% higher at 123.48 after losing $0.72 (-0.58%) today, but still slightly outperforming the Nasdaq 100 (-0.92%). Trading $1.07 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 missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CHKP as at Jul 24, 2020):
Friday's trading range has been $2.10 (1.7%), that's below the last trading month's daily average range of $3.36. 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 notably higher than usual for CHKP.
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. After moving higher in the prior session, Check Point closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on July 8th, CHKP actually gained 2.41% on the following trading day.
Prices are trading close to the key technical support level at 121.31 (S1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 121.31 where further sell stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Check Point. Out of 211 times, CHKP closed higher 58.29% 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 64.45% with an average market move of 0.97%.