K pushes through key technical resistance level
Kellogg Company (K) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
K finished Thursday at 58.76 gaining $2.59 (4.61%), notably underperforming the S&P 500 (6.24%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (K as at Mar 26, 2020):
Thursday's trading range has been $4.02 (7.15%), that's slightly above the last trading month's daily average range of $3.94. 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 significantly higher than usual for K. Prices continued to consolidate within a tight trading range between 54.02 and 59.62 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 58.25 (now S1), which is likely to act as support going forward. The last time this happened on March 17th, K actually lost -0.38% on the following trading day. After having been unable to move above 59.27 in the prior session, the stock ran into sellers again around the same price level today, failing to move higher than 59.62.
Though the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Kellogg. Out of 614 times, K closed higher 52.77% 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 55.21% with an average market move of 0.13%.