KO closes below its opening price unable to hold early session gains
Coca-Cola Company (KO) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
KO ended the week 2.1% higher at 49.20 after losing $0.38 (-0.77%) today, slightly underperforming the Dow Indu. (-0.38%). Trading $0.28 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 below Thursday's low at 49.21, the share confirmed its breakout through the prior session low after trading up to $0.04 below it intraday.
Daily Candlestick Chart (KO as at May 17, 2019):
Friday's trading range has been $0.38 (0.77%), that's below the last trading month's daily average range of $0.58. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for KO.
One bearish candlestick pattern matches today's price action, the Shooting Star.
Unable to break through the key technical resistance level at 49.47 (R1), the market closed below it after spiking up to 49.55 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 49.21 in the previous session, Coca-Cola found buyers again around the same price level today at 49.17. The last time this happened on May 8th, KO actually lost -0.94% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 48.37.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term. With its 50-day moving average crossing above its 200-day moving average, KO has entered a so-called "Golden Cross" for the first time since April 3rd. Showing increasing upward momentum in the short and medium-term the "Golden Cross" is known to indicate a potential bull market on the horizon.
Buying might speed up should prices move above the nearby swing high at 49.66 where further buy stops could get triggered. With prices trading close to this year's high at 49.94, upside momentum might accelerate should the stock be able to break out to new highs for the year.
Among the 10 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 Coca-Cola. Out of 7 times, KO 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 57.14% with an average market move of 0.77%.