HBI breaks below key technical support level
Hanesbrands Inc. (HBI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
HBI ended the week 12.56% higher at 9.59 after losing $0.22 (-2.24%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HBI as at May 22, 2020):
Friday's trading range has been $0.63 (6.38%), that's slightly above the last trading month's daily average range of $0.58. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HBI.
One bearish candlestick pattern matches today's price action, the Dark Cloud Cover. The last time a Dark Cloud Cover showed up on October 31, 2018, HBI lost -5.48% on the following trading day.
Prices broke below the key technical support level at 9.78 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 9.38 in the prior session, the market found buyers again around the same price level today at 9.44.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Further buying might move prices higher should the market test April's close-by high at 10.49.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Dark Cloud Cover" stand out. Its common bearish interpretation has been confirmed for Hanesbrands. Out of 3 times, HBI closed lower 66.67% 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 eight trading days, showing a win rate of 66.67% with an average market move of -1.73%.