JACK tanks -3.43% on high volume
Jack In The Box Inc. (JACK) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, JACK ended Wednesday at 81.57 tanking $2.90 (-3.43%) on high volume, notably underperforming the S&P 500 (-0.46%). This is the biggest single-day loss in over a month. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 84.32, the share confirmed its breakout through the prior session low after trading up to $2.82 below it intraday.
Daily Candlestick Chart (JACK as at Sep 16, 2020):
Wednesday's trading range has been $3.04 (3.6%), that's slightly above the last trading month's daily average range of $2.80. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for JACK.
Two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
After trading down to 81.50 earlier during the day, the stock bounced off the key technical support level at 81.53 (S1). The failure to close below the support might increase that levels importance as support going forward. Jack In closed back below the 20-day moving average at 83.50. When this moving average was crossed below the last time on September 11th, JACK actually gained 3.06% on the following trading day.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the nearby swing low at 80.50 where further sell stops could get activated. Further selling might move prices lower should the market test August's close-by low at 77.57.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Jack In. Out of 423 times, JACK closed higher 56.50% 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 59.10% with an average market move of 0.67%.