CPB breaks below key technical support level
Campbell Soup Company (CPB) Technical Analysis Report for Feb 25, 2020 | by Techniquant Editorial Team
CPB ended Tuesday at 47.88 losing $0.14 (-0.29%), but still notably outperforming the S&P 500 (-3.03%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CPB as at Feb 25, 2020):
Tuesday's trading range has been $0.75 (1.56%), that's slightly above the last trading month's daily average range of $0.67. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CPB. Prices continued to consolidate within a tight trading range between 47.34 and 48.34 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 47.45 (S1). Prices broke below the key technical support level at 47.89 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 47.49 in the prior session, the stock found buyers again around the same price level today at 47.59. The last time this happened on February 5th, CPB actually lost -1.71% on the following trading day.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the close-by swing low at 47.49 where further sell stops might get activated. With prices trading close to this year's low at 46.84, downside momentum could accelerate should Campbell Soup break out to new lows 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 Spinning Top" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Campbell Soup. Out of 218 times, CPB closed higher 55.96% 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 53.67% with an average market move of 0.29%.