KR finds buyers at key support level
Kroger Company (KR) Technical Analysis Report for Dec 05, 2019 | by Techniquant Editorial Team
KR ended Thursday at 26.80 tanking $0.84 (-3.04%) on high volume, strongly underperforming the S&P 500 (0.15%) following today's earnings report. This is the biggest single-day loss in over three months. Closing below Wednesday's low at 27.34, the share confirmed its breakout through the prior session low after trading up to $0.88 below it intraday.
Daily Candlestick Chart (KR as at Dec 05, 2019):
KR is set to report earnings on Thursday. For the upcoming report, analysts expect the company to have earned $0.48 per share. The company's last earnings report was released on Sept. 12, 2019, when Kroger Company reported earnings of $0.44 per share topping market expectations by 7.3%.
Thursday's trading range has been $1.35 (4.91%), that's far above the last trading month's daily average range of $0.47. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for KR.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on October 1st, KR lost -2.11% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 26.46 earlier during the day, the stock bounced off the key technical support level at 26.65 (S1). The failure to close below the support could increase that levels significance as support going forward. The market closed below the 20-day moving average at 27.03 for the first time since October 21st. After having been unable to move above 27.75 in the previous session, Kroger ran into sellers again around the same price level today, missing to move higher than 27.81.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 27.03.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post weak Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for Kroger. Out of 3 times, KR closed lower 66.67% 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 nine trading days, showing a win rate of 66.67% with an average market move of -2.08%.