KDP enters Golden Cross for the first time since March 4th
Keurig Dr Pepper Inc. (KDP) Technical Analysis Report for Jul 06, 2020 | by Techniquant Editorial Team
KDP ended Monday at 28.56 edging higher $0.03 (0.11%) on low volume, notably underperforming the S&P 500 (1.59%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (KDP as at Jul 06, 2020):
Monday's trading range has been $0.39 (1.36%), that's below the last trading month's daily average range of $0.62. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for KDP. Prices continued to consolidate within a tight trading range between 28.32 and 28.86 where it has been caught now for the last three trading days.
The stock managed to close back above the 20-day moving average at 28.56.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish. With its 50-day moving average crossing above its 200-day moving average, the share has entered a so-called "Golden Cross" for the first time since March 4th. Showing increasing upward momentum in the short and medium-term the "Golden Cross" is known to indicate a potential bull market on the horizon. When the last "Golden Cross" happened on November 22, 2019, KDP gained 1.32% on the following trading day.
Buying might accelerate should prices move above the nearby swing high at 28.86 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 27.92 where further sell stops could get activated. With prices trading close to this year's high at 29.58, upside momentum might accelerate should Keurig Dr be able to break out to new highs for the year. Further selling could move prices lower should the market test June's nearby low at 27.64.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Golden Cross" stand out. Its common bullish interpretation has been confirmed for Keurig Dr. Out of 7 times, KDP closed higher 85.71% 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 85.71% with an average market move of 5.45%.