DRH breaks below Thursday's low
Diamondrock Hospitality Company (DRH) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DRH ended the week 2.57% higher at 10.39 after losing $0.05 (-0.48%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $0.07 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 10.41, the market confirmed its breakout through the prior session low after trading up to $0.05 below it intraday.
Daily Candlestick Chart (DRH as at Feb 14, 2020):
Friday's trading range has been $0.17 (1.63%), that's slightly below the last trading month's daily average range of $0.20. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DRH.
Despite a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle.
After trading down to 10.36 earlier during the day, Diamondrock Hospitality bounced off the key technical support level at 10.38 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on January 30th, DRH actually lost -1.73% on the following trading day. After having been unable to move above 10.55 in the prior session, DRH ran into sellers again around the same price level today, missing to move higher than 10.53.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 10.55 where further buy stops might get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Diamondrock Hospitality. Out of 475 times, DRH closed higher 59.37% 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 51.79% with an average market move of 0.67%.