DRI closes lower for the 2nd day in a row
Darden Restaurants Inc. (DRI) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DRI finished the month 0.17% higher at 75.90 after losing $2.65 (-3.37%) today, strongly underperforming the S&P 500 (0.77%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 76.45, the share confirmed its breakout through the previous session low after trading up to $0.68 below it intraday.
Daily Candlestick Chart (DRI as at Jul 31, 2020):
Friday's trading range has been $2.71 (3.45%), that's slightly below the last trading month's daily average range of $3.01. 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.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 75.69 (S1). Darden Restaurants closed back below the 50-day moving average at 76.52. When this moving average was crossed below the last time on Tuesday, DRI actually gained 3.96% on the following trading day. After having been unable to move above 78.91 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 78.48.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 79.24 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 74.22 where further sell stops might get activated. As prices are trading close to July's high at 79.44, upside momentum could accelerate should the stock mark new highs for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Darden Restaurants. Out of 393 times, DRI closed higher 59.03% 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 58.52% with an average market move of 0.91%.