DAR dominated by bulls lifting the market higher throughout the day
Darling Ingredients Inc. (DAR) Technical Analysis Report for Feb 20, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DAR ended Thursday at 28.64 gaining $0.26 (0.92%), significantly outperforming the S&P 500 (-0.38%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DAR as at Feb 20, 2020):
Thursday's trading range has been $0.55 (1.95%), that's slightly below the last trading month's daily average range of $0.61. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DAR. Prices continued to consolidate within a tight trading range between 28.15 and 28.80 where it has been caught now for the last three trading days.
Notwithstanding a weak opening the market managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the White Candle which are both known as bullish patterns. The last time a White Candle showed up on February 4th, DAR gained 1.81% on the following trading day.
The stock managed to close back above the 20-day moving average at 28.46 for the first time since February 14th.
Though the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the nearby swing high at 29.00 where further buy stops could get activated. With prices trading close to this year's high at 29.57, upside momentum might accelerate should Darling Ingredients be able to break out to new highs for the year. As prices are trading close to February's high at 29.22, upside momentum could speed up should DAR mark new highs for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Darling Ingredients. Out of 753 times, DAR closed higher 51.53% 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 54.32% with an average market move of 0.87%.