PDCO closes below its opening price unable to hold early session gains
Patterson Companies Inc. (PDCO) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PDCO finished Wednesday at 24.19 losing $0.12 (-0.49%), slightly underperforming the S&P 500 (-0.46%). Trading $0.18 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 11th, PDCO actually gained 3.09% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (PDCO as at Sep 16, 2020):
Wednesday's trading range has been $0.53 (2.16%), that's below the last trading month's daily average range of $1.12. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for PDCO. Prices continued to consolidate within a tight trading range between 23.48 and 25.17 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical resistance level at 24.77 (R1). After having been unable to move lower than 24.15 in the previous session, the share found buyers again around the same price level today at 24.14.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the close-by swing high at 25.17 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 23.48 where further sell stops might get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Patterson Companies. Out of 717 times, PDCO closed higher 53.14% 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 57.18% with an average market move of 0.55%.