DRI closes lower for the 2nd day in a row


Darden Restaurants Inc. (DRI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team

Highlights

DRI dominated by bears dragging the market lower throughout the day
DRI closes lower for the 2nd day in a row
DRI finds buyers again around 75.14
DRI closes within previous day's range after lackluster session

Overview

Moving lower for the 2nd day in a row, DRI ended the week 8.65% higher at 75.63 after losing $1.59 (-2.06%) today on low volume, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.

Daily Candlestick Chart (DRI as at May 22, 2020):

Daily technical analysis candlestick chart for Darden Restaurants Inc. (DRI) as at May 22, 2020

Friday's trading range has been $2.84 (3.66%), that's below the last trading month's daily average range of $4.14. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DRI.

Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.

After having been unable to move lower than 75.58 in the prior session, the market found buyers again around the same price level today at 75.14. The last time this happened on May 7th, DRI gained 5.94% on the following trading day.

While still in a long-term downtrend, the short and medium-term trends both turned bullish already.

Buying could accelerate should prices move above the nearby swing high at 78.93 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 72.62 where further sell stops might get activated. Further buying could move prices higher should the market test April's nearby high at 81.18.

Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Darden Restaurants. Out of 455 times, DRI closed higher 56.48% 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 59.78% with an average market move of 0.56%.


Market Conditions for DRI as at May 22, 2020

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