FLO finds buyers at key support level
Flowers Foods Inc. (FLO) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
FLO ended Wednesday at 23.41 gaining $0.14 (0.6%) on high volume, significantly outperforming the S&P 500 (-0.46%). Trading up to $0.25 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (FLO as at Sep 16, 2020):
Wednesday's trading range has been $0.55 (2.36%), that's above the last trading month's daily average range of $0.45. 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 FLO.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish High-Wave Candle showed up on March 16th, FLO gained 14.10% on the following trading day.
After trading down to 23.07 earlier during the day, the market bounced off the key technical support level at 23.17 (S1). The failure to close below the support could increase that levels significance as support going forward. After spiking up to 23.62 during the day, the stock found resistance at the 50-day moving average at 23.47.
While Flowers Foods 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 speed up should prices move below the close-by swing low at 23.00 where further sell stops might get triggered. Further selling could move prices lower should the market test August's nearby low at 22.76.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish High-Wave Candle" stand out. Its common bullish interpretation has been confirmed for Flowers Foods. Out of 43 times, FLO closed higher 69.77% 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 67.44% with an average market move of 1.45%.