KDP closes below its opening price unable to hold early session gains
Keurig Dr Pepper Inc. (KDP) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
KDP ended Thursday at 24.79 losing $0.21 (-0.84%), significantly underperforming the S&P 500 (6.24%). Trading $1.04 higher after the open, the stock 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 (KDP as at Mar 26, 2020):
Thursday's trading range has been $1.54 (6.2%), that's slightly below the last trading month's daily average range of $1.71. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for KDP. Prices continued to consolidate within a tight trading range between 22.72 and 25.88 where it has been caught now for the whole last trading week.
After moving higher in the prior session, Keurig Dr closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, three candlestick patterns are matching today's price action, the Gravestone Doji and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji.
Prices are trading close to the key technical support level at 24.06 (S1). After having been unable to move above 25.70 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 25.88. The last time this happened on March 18th, KDP actually gained 22.15% on the following trading day.
While the share 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 six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Keurig Dr. Out of 389 times, KDP closed higher 55.01% 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 62.98% with an average market move of 0.61%.