NWL plummets $1.32 (-7.45%) after posting strong earnings
Newell Brands Inc. (NWL) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
NWL ended the month 3.27% higher at 16.40 after tanking $1.32 (-7.45%) today on high volume, significantly underperforming the S&P 500 (0.77%) following today's earnings report. This is the biggest single-day loss in over three months. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 17.12, the share confirmed its breakout through the prior session low after trading up to $0.96 below it intraday.
Daily Candlestick Chart (NWL as at Jul 31, 2020):
NWL reported earnings of $0.3 per share before today's market open. With analysts having expected an EPS of $0.18, Newell Brands Inc. topped market expectations by 66.7%. The company's last earnings report was released on May 1, 2020, when Newell Brands Inc. reported earnings of $0.09 per share surpassing market expectations by 50.0%.
Friday's trading range has been $1.84 (10.22%), that's far above the last trading month's daily average range of $0.57. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NWL.
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. Even with a strong opening the stock closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns. The last time a Bearish Belt-hold showed up on June 10th, NWL lost -6.59% on the following trading day.
Prices are trading close to the key technical support level at 16.03 (S1). The market closed back below the 200-day moving average at 16.60 for the first time since July 21st.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 15.87 where further sell stops could get activated.
Among the 17 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. Its common bearish interpretation has been confirmed for Newell Brands. Out of 20 times, NWL closed lower 65.00% 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 six trading days, showing a win rate of 55.00% with an average market move of -1.18%.