CLX breaks below key technical support level
Clorox Company (CLX) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CLX ended Wednesday at 207.35 losing $2.24 (-1.07%), underperforming the S&P 500 (-0.46%). Today's close at 207.35 marks the lowest recorded closing price since June 12th. Trading $1.79 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 10th, CLX lost -0.45% on the following trading day. Closing below Tuesday's low at 208.68, the market confirmed its breakout through the prior session low after trading up to $1.78 below it intraday.
Daily Candlestick Chart (CLX as at Sep 16, 2020):
Wednesday's trading range has been $4.05 (1.94%), that's below the last trading month's daily average range of $5.36. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CLX.
Prices broke below the key technical support level at 207.39 (now R1), which is likely to act as resistance going forward.
Crossing below the lower Bollinger Band for the first time since September 4th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 218.80 or signal the beginning of a strong momentum breakout leading to even lower prices.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Clorox. Out of 124 times, CLX closed higher 55.65% 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 66.94% with an average market move of 1.19%.