FTCH breaks below key technical support level
Farfetch Limited Class A (FTCH) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, FTCH ended the week -5.75% lower at 23.92 after losing $0.54 (-2.21%) today on high volume, notably underperforming the S&P 500 (-1.12%). Today's close at 23.92 marks the lowest recorded closing price since July 28th. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (FTCH as at Sep 18, 2020):
Friday's trading range has been $1.29 (5.23%), that's slightly below the last trading month's daily average range of $1.46. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FTCH.
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. Additionally, 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.
Prices broke below the key technical support level at 24.21 (now R1), which is likely to act as resistance going forward. The last time this happened on June 19th, FTCH actually gained 5.61% on the following trading day. After having been unable to move lower than 23.58 in the previous session, the share found buyers again around the same price level today at 23.50.
Although Farfetch is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Farfetch. Out of 15 times, FTCH closed higher 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 long side has been after 10 trading days, showing a win rate of 66.67% with an average market move of 5.24%.