HBI unable to break through key resistance level
Hanesbrands Inc. (HBI) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, HBI ended the week 0.7% higher at 14.30 after losing $0.09 (-0.63%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (HBI as at Feb 14, 2020):
Friday's trading range has been $0.31 (2.17%), that's below the last trading month's daily average range of $0.47. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HBI.
Two candlestick patterns are matching today's price action, the Shooting Star which is known as bearish pattern and one neutral pattern, the Doji.
Prices are trading close to the key technical support level at 14.03 (S1). Unable to break through the key technical resistance level at 14.41 (R1), the stock closed below it after spiking up to 14.54 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 14.27 in the prior session, the market found buyers again around the same price level today at 14.23. The last time this happened on Tuesday, HBI gained 2.93% on the following trading day.
Though Hanesbrands is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could speed up should prices move below the close-by swing low at 13.83 where further sell stops might get activated. With prices trading close to this year's low at 13.36, downside momentum could accelerate should the share break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Shooting Star" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Hanesbrands. Out of 58 times, HBI closed higher 65.52% 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 60.34% with an average market move of 0.50%.