COLM tanks $4.67 (-5.8%) after posting strong earnings
Columbia Sportswear Company (COLM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, COLM finished the month -5.88% lower at 75.84 after tanking $4.67 (-5.8%) today on high volume, strongly underperforming the S&P 500 (0.77%) following Thursday's earnings report. This is the biggest single-day loss in over a month. The last time we've seen such an unusually strong single-day loss on June 11th, COLM actually gained 2.53% on the following trading day. Today's close at 75.84 marks the lowest recorded closing price since July 9th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 80.08, the market confirmed its breakout through the prior session low after trading up to $4.91 below it intraday.
Daily Candlestick Chart (COLM as at Jul 31, 2020):
COLM reported earnings of $-0.77 per share after Thursday's market close. With analysts having expected an EPS of $-0.88, Columbia Sportswear Company surpassed market expectations by 12.5%. The company's last earnings report was released on Feb. 6, 2020, when Columbia Sportswear Company reported earnings of $1.67 per share meeting market expectations.
Friday's trading range has been $7.20 (8.83%), that's far above the last trading month's daily average range of $2.29. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for COLM.
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. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Columbia Sportswear closed below the 50-day moving average at 78.72 for the first time since May 19th. After having been unable to move above 82.03 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 82.37.
While the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Further selling might move prices lower should the market test June's close-by low at 73.04.
Among the 16 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Columbia Sportswear. Out of 162 times, COLM closed higher 53.70% 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 59.88% with an average market move of 1.15%.