CTAS dominated by bears dragging the market lower throughout the day
Cintas Corporation (CTAS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CTAS ended Wednesday at 326.21 losing $1.96 (-0.6%), but still notably outperforming the Nasdaq 100 (-1.67%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 327.19, Cintas confirmed its breakout through the prior session low after trading up to $1.45 below it intraday.
Daily Candlestick Chart (CTAS as at Sep 16, 2020):
Wednesday's trading range has been $5.45 (1.65%), that's slightly below the last trading month's daily average range of $6.87. 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 slightly lower than usual for CTAS.
Regardless of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 322.15 (S1). The stock closed back below the 20-day moving average at 326.78. After having been unable to move above 331.41 in the prior session, the share ran into sellers again around the same price level today, missing to move higher than 331.19. The last time this happened on September 9th, CTAS lost -2.59% on the following trading day.
Although CTAS is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 331.41 where further buy stops might get triggered.
Among the nine 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. Though it is usually interpreted as bearish, it has actually shown to be bullish for Cintas. Out of 157 times, CTAS closed higher 66.88% 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 71.97% with an average market move of 1.86%.