FSLR breaks below Tuesday's low
First Solar Inc. (FSLR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
FSLR ended Wednesday at 71.96 losing $0.93 (-1.28%), underperforming the S&P 500 (-0.46%). Closing below Tuesday's low at 72.03, the stock confirmed its breakout through the prior session low after trading up to $0.18 below it intraday.
Daily Candlestick Chart (FSLR as at Sep 16, 2020):
Wednesday's trading range has been $2.89 (3.92%), that's slightly below the last trading month's daily average range of $3.11. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for FSLR.
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 market 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 spiking up to 74.74 during the day, the share found resistance at the 20-day moving average at 74.37. The last time this happened on July 2nd, FSLR actually gained 7.08% on the following trading day. After having been unable to move lower than 72.03 in the prior session, First Solar found buyers again around the same price level today at 71.85.
Although FSLR 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 speed up should prices move below the nearby swing low at 69.53 where further sell stops could get triggered. As prices are trading close to September's low at 67.41, downside momentum might accelerate should the stock mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for First Solar. Out of 467 times, FSLR closed higher 56.75% 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 50.96% with an average market move of 0.28%.