FL finds support at 20-day moving average
Foot Locker Inc. (FL) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, FL finished the month 0.79% higher at 29.39 after losing $1.22 (-3.99%) today, strongly underperforming the S&P 500 (0.77%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 30.04, the market confirmed its breakout through the prior session low after trading up to $1.03 below it intraday.
Daily Candlestick Chart (FL as at Jul 31, 2020):
Friday's trading range has been $1.83 (5.97%), that's far above the last trading month's daily average range of $1.20. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FL.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Regardless of a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 29.01 during the day, Foot Locker found support at the 20-day moving average at 29.21. The last time this happened on May 22nd, FL gained 5.18% on the following trading day. The stock closed back below the 50-day moving average at 29.55 for the first time since July 20th. After having been unable to move above 30.71 in the prior session, FL ran into sellers again around the same price level today, failing to move higher than 30.84.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Further selling could move prices lower should the market test June's nearby low at 26.98.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 20" stand out. Its common bullish interpretation has been confirmed for Foot Locker. Out of 61 times, FL closed higher 60.66% 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 54.10% with an average market move of 1.51%.