FTCH declines to lowest close since July 29th
Farfetch Limited Class A (FTCH) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, FTCH finished Wednesday at 24.86 losing $0.69 (-2.7%), notably underperforming the S&P 500 (-0.46%). Today's close at 24.86 marks the lowest recorded closing price since July 29th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 25.35, the share confirmed its breakout through the previous session low after trading up to $0.83 below it intraday.
Daily Candlestick Chart (FTCH as at Sep 16, 2020):
Wednesday's trading range has been $1.53 (5.89%), that's slightly above the last trading month's daily average range of $1.44. 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 lower than usual for FTCH.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 24.21 (S1). The stock closed below the 50-day moving average at 25.41 for the first time since April 9th. When this moving average was crossed below the last time on March 6th, FTCH lost -7.99% on the following trading day.
Although Farfetch 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 24.15 where further sell stops could get activated. As prices are trading close to September's low at 24.06, downside momentum might speed up should the market mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Its common bearish interpretation has been confirmed for Farfetch. Out of 10 times, FTCH closed lower 60.00% 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 70.00% with an average market move of -8.01%.