HRL closes within previous day's range
Hormel Foods Corporation (HRL) Technical Analysis Report for Aug 05, 2020 | by Techniquant Editorial Team
HRL finished Wednesday at 50.86 losing $0.27 (-0.53%), strongly underperforming the S&P 500 (0.64%). Trading $0.39 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. 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 Aug 05, 2020):
Wednesday's trading range has been $0.84 (1.65%), that's slightly above the last trading month's daily average range of $0.84. 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 51.43 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 50.41 (S1). Unable to break through the key technical resistance level at 51.24 (R1), the market closed below it after spiking up to 51.43 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on Monday, HRL actually gained 0.65% on the following trading day.
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 50.41 where further sell stops might get activated. With prices trading close to this year's high at 51.53, upside momentum could accelerate should the stock 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. Though it is usually interpreted as neutral, it has actually shown to be bullish for Hormel Foods. Out of 640 times, HRL closed higher 55.63% 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 63.59% with an average market move of 0.84%.