HRL pops to highest close ever
Hormel Foods Corporation (HRL) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
HRL finished the month 5.37% higher at 50.86 after gaining $0.11 (0.22%) today on high volume, underperforming the S&P 500 (0.77%). Today's close at 50.86 marks the highest recorded closing price ever. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HRL as at Jul 31, 2020):
Friday's trading range has been $0.92 (1.82%), that's slightly above the last trading month's daily average range of $0.85. 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 slightly higher than usual for HRL. Prices continued to consolidate within a tight trading range between 50.16 and 51.17 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on July 16th, HRL actually gained 0.79% on the following trading day.
Unable to break through the key technical resistance level at 51.09 (R1), the share closed below it after spiking up to 51.17 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move lower than 50.16 in the previous session, the market found buyers again around the same price level today at 50.25.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 50.16 where further sell stops might get triggered. With prices trading close to this year's high at 51.53, upside momentum could accelerate should Hormel Foods be able to break out to new highs for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Hormel Foods. Out of 639 times, HRL closed higher 55.71% 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 63.69% with an average market move of 0.83%.