DRI closes within prior day's range after lackluster session
Darden Restaurants Inc. (DRI) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
DRI ended the month -1.42% lower at 75.77 after losing $0.86 (-1.12%) today, strongly underperforming the S&P 500 (1.54%). Trading up to $1.26 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DRI as at Jun 30, 2020):
Tuesday's trading range has been $2.00 (2.65%), that's far below the last trading month's daily average range of $4.56. 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 DRI.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Unable to break through the key technical resistance level at 75.87 (R1), the share closed below it after spiking up to 76.28 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. When prices bounced off a significant resistance level the last time on June 25th, DRI lost -2.20% on the following trading day.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the close-by swing high at 77.25 where further buy stops could get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Darden Restaurants. Out of 433 times, DRI closed higher 52.42% 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 57.97% with an average market move of 0.75%.