CREE dominated by bears dragging the market lower throughout the day
Cree Inc. (CREE) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
CREE finished the week 2.87% higher at 48.41 after losing $1.02 (-2.06%) today, strongly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 48.61, the share confirmed its breakout through the previous session low after trading up to $0.73 below it intraday.
Daily Candlestick Chart (CREE as at Feb 14, 2020):
Friday's trading range has been $1.92 (3.86%), that's slightly above the last trading month's daily average range of $1.81. 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 CREE.
In spite of a strong opening Cree closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on January 29th, CREE lost -7.56% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 47.88 during the day, the market found support at the 50-day moving average at 48.12. Prices broke below the key technical support level at 48.66 (now R1), which is likely to act as resistance going forward.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might speed up should prices move above the close-by swing high at 50.20 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Cree. Out of 21 times, CREE closed lower 57.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 57.14% with an average market move of -0.91%.