FAST breaks below Tuesday's low
Fastenal Company (FAST) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
FAST finished Wednesday at 44.26 losing $0.42 (-0.94%), but still outperforming the Nasdaq 100 (-1.67%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 44.42, the stock confirmed its breakout through the previous session low after trading up to $0.23 below it intraday.
Daily Candlestick Chart (FAST as at Sep 16, 2020):
Wednesday's trading range has been $0.98 (2.18%), that's slightly below the last trading month's daily average range of $1.03. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for FAST.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on January 24th, FAST actually lost -0.76% on the following trading day.
While the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 43.47 where further sell stops might get triggered. Trading close to July's low at 42.38 we could see further downside momentum if potential sell stops at the level get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Fastenal. Out of 485 times, FAST closed higher 51.96% 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 55.26% with an average market move of 0.77%.