FBHS closes above its opening price after recovering from early selling pressure
Fortune Brands Home & Security Inc. (FBHS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
FBHS ended the week 13.03% higher at 60.54 after edging higher $0.21 (0.35%) today on low volume, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 60.54 marks the highest recorded closing price since March 5th. 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. The last time this happened on May 4th, FBHS gained 3.83% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (FBHS as at May 22, 2020):
Friday's trading range has been $1.38 (2.28%), that's below the last trading month's daily average range of $2.35. 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 FBHS. Prices continued to consolidate within a tight trading range between 59.21 and 61.81 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading down to 59.21 earlier during the day, Fortune Brands bounced off the key technical support level at 59.43 (S1). The failure to close below the support could increase that levels significance as support going forward.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 61.81 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Fortune Brands. Out of 370 times, FBHS closed higher 56.49% 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 59.46% with an average market move of 0.92%.