DRI closes below its opening price unable to hold early session gains
Darden Restaurants Inc. (DRI) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
DRI finished Wednesday at 92.97 losing $0.41 (-0.44%), but still slightly outperforming the S&P 500 (-0.46%). Trading $1.38 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 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 Sep 16, 2020):
Wednesday's trading range has been $2.18 (2.33%), that's below the last trading month's daily average range of $3.13. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DRI.
After moving higher in the previous session, the share closed lower but above the prior day's open today, forming a bearish Harami Candle. The last time this candlestick pattern showed up on July 27th, DRI lost -0.69% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Shooting Star.
Prices are trading close to the key technical support level at 90.44 (S1). After having been unable to move above 94.45 in the previous session, Darden Restaurants ran into sellers again around the same price level today, missing to move higher than 94.75.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six 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. Though it is usually interpreted as bearish, it has actually shown to be bullish for Darden Restaurants. Out of 445 times, DRI closed higher 57.30% 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 60.22% with an average market move of 0.60%.