KR breaks below key technical support level
Kroger Company (KR) Technical Analysis Report for Jul 16, 2019 | by Techniquant Editorial Team
KR ended Tuesday at 21.96 losing $0.12 (-0.54%), slightly underperforming the S&P 500 (-0.34%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (KR as at Jul 16, 2019):
Tuesday's trading range has been $0.17 (0.77%), that's far below the last trading month's daily average range of $0.49. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for KR.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on May 28th, KR lost -2.50% on the following trading day.
Prices broke below the key technical support level at 22.03 (now R1), which is likely to act as resistance going forward.
Though 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.
Buying might accelerate should prices move above the close-by swing high at 22.15 where further buy stops could get triggered. With prices trading close to this year's low at 21.17, downside momentum might speed up should Kroger break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Kroger. Out of 517 times, KR closed higher 56.87% 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 59.57% with an average market move of 0.60%.