K closes above its opening price after recovering from early selling pressure

Overview

Moving lower for the 2nd day in a row, K finished the week -5.69% lower at 55.36 after losing $0.48 (-0.86%) today on high volume, underperforming the S&P 500 (0.07%). Today's close at 55.36 marks the lowest recorded closing price since December 28, 2012. Trading up to $0.50 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Wednesday, K actually lost -5.61% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.

Daily Candlestick Chart (K as at Feb 08, 2019):

Friday's trading range has been $1.08 (1.95%), that's slightly above the last trading month's daily average range of $0.91. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for K.

Four candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man.

After trading down to 54.82 earlier during the day, Kellogg bounced off the key technical support level at 55.11 (S1). The failure to close below the support could increase that levels significance as support going forward.

With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 58.39.

The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.

Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Long-Legged Doji" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Kellogg. Out of 25 times, K closed higher 64.00% 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 60.00% with an average market move of 0.91%.