FIT runs into sellers around 6.50 for the forth day in a row
Fitbit Inc. Class A (FIT) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
FIT finished the week -1.68% lower at 6.44 after losing $0.03 (-0.46%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 6.44 marks the lowest recorded closing price since April 3rd. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 6.46, the stock confirmed its breakout through the prior session low after trading up to $0.04 below it intraday.
Daily Candlestick Chart (FIT as at May 22, 2020):
Friday's trading range has been $0.08 (1.23%), that's below the last trading month's daily average range of $0.10. 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 FIT.
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 Black Candle showed up on May 13th, FIT actually gained 0.46% on the following trading day.
Prices are trading close to the key technical resistance level at 6.49 (R1). The share was sold again around 6.50 after having seen highs at 6.50, 6.49 and 6.49 in the last three trading sessions. Obviously there is something going on at that level.
While Fitbit is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the nearby swing low at 6.40 where further sell stops could get triggered. Further selling might move prices lower should the market test April's close-by low at 6.36.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. Its common bearish interpretation has been confirmed for Fitbit. Out of 19 times, FIT closed lower 47.37% 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 73.68% with an average market move of -2.76%.