KHC breaks below key technical support level
The Kraft Heinz Company (KHC) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, KHC ended the week -9.0% lower at 26.88 after losing $0.89 (-3.2%) today on high volume, strongly underperforming the Nasdaq 100 (0.29%). Today's close at 26.88 marks the lowest recorded closing price since October 9, 2019. Closing below Thursday's low at 27.36, The Kraft confirmed its breakout through the prior session low after trading up to $0.90 below it intraday.
Daily Candlestick Chart (KHC as at Feb 14, 2020):
Friday's trading range has been $1.46 (5.24%), that's far above the last trading month's daily average range of $0.78. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for KHC.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 27.41 (now R1), which is likely to act as resistance 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 although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 29.68.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Its common bearish interpretation has been confirmed for The Kraft. Out of 205 times, KHC closed lower 53.66% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 57.07% with an average market move of -0.83%.