EAT ends the day indecisive
Brinker International Inc. (EAT) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EAT ended the week -1.0% lower at 41.57 after losing $0.46 (-1.09%) today, strongly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (EAT as at Feb 14, 2020):
Friday's trading range has been $1.32 (3.15%), that's slightly below the last trading month's daily average range of $1.51. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EAT.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading as low as 41.03 during the day, the stock found support at the 200-day moving average at 41.47. Unable to break through the key technical resistance level at 42.28 (R1), the market closed below it after spiking up to 42.35 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on Wednesday, EAT lost -2.51% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 40.75, downside momentum might accelerate should Brinker International break out to new lows for the year. Trading close to December's low at 40.18 we could see further downside momentum if potential sell stops at the level get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 200" stand out. Its common bullish interpretation has been confirmed for Brinker International. Out of 13 times, EAT closed higher 53.85% 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 53.85% with an average market move of 3.81%.