FIT drops to lowest close since January 4th
Fitbit Inc. Class A (FIT) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, FIT finished Tuesday at 5.50 losing $0.07 (-1.26%), significantly underperforming the S&P 500 (0.05%). Today's close at 5.50 marks the lowest recorded closing price since January 4th. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (FIT as at Apr 16, 2019):
Tuesday's trading range has been $0.17 (3.03%), that's slightly above the last trading month's daily average range of $0.16. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FIT.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on April 12th, FIT lost -2.45% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 5.85.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could accelerate should prices move below the close-by swing low at 5.41 where further sell stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for Fitbit. Out of 30 times, FIT closed lower 53.33% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 66.67% with an average market move of -3.19%.