HRL breaks back above 100-day moving average
Hormel Foods Corporation (HRL) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
HRL ended the week -2.07% lower at 46.93 after gaining $0.92 (2.0%) today, strongly outperforming the S&P 500 (0.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HRL as at May 22, 2020):
Friday's trading range has been $1.80 (3.96%), that's far above the last trading month's daily average range of $1.23. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HRL.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
The share managed to close back above the 100-day moving average at 46.30. Prices are trading close to the key technical resistance level at 47.87 (R1). After having been unable to move lower than 45.25 in the previous session, the stock found buyers again around the same price level today at 45.41. The last time this happened on Wednesday, HRL actually lost -4.13% on the following trading day.
Though Hormel Foods is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Its common bullish interpretation has been confirmed for Hormel Foods. Out of 286 times, HRL closed higher 53.15% 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 61.89% with an average market move of 0.75%.