DHI breaks below Friday's low
D.R. Horton Inc. (DHI) Technical Analysis Report for Jul 13, 2020 | by Techniquant Editorial Team
DHI finished Monday at 56.91 losing $1.75 (-2.98%), significantly underperforming the S&P 500 (-0.94%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 57.87, the share confirmed its breakout through the previous session low after trading up to $1.09 below it intraday.
Daily Candlestick Chart (DHI as at Jul 13, 2020):
Monday's trading range has been $2.89 (4.89%), that's far above the last trading month's daily average range of $2.03. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DHI.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Despite a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Unable to break through the key technical resistance level at 59.24 (R1), the market closed below it after spiking up to 59.67 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on July 8th, DHI lost -1.38% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Trading close to May's high at 59.84 we might see further upside momentum if potential buy stops at the level get triggered. As prices are trading close to July's low at 53.50, downside momentum could speed up should D. R. Horton mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Its common bearish interpretation has been confirmed for D. R. Horton. Out of 99 times, DHI closed lower 57.58% of the time on the next trading day after the market condition occurred.