PEP closes within prior day's range
PepsiCo Inc. (PEP) Technical Analysis Report for Jul 16, 2019 | by Techniquant Editorial Team
PEP ended Tuesday at 133.80 losing $0.35 (-0.26%), but still slightly outperforming the Nasdaq 100 (-0.5%). Trading $1.16 higher after the open, PepsiCo was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (PEP as at Jul 16, 2019):
Tuesday's trading range has been $2.19 (1.63%), that's far above the last trading month's daily average range of $1.62. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for PEP.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
Unable to break through the key technical resistance level at 134.44 (R1), the stock closed below it after spiking up to 135.24 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on July 11th, PEP lost -0.80% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the nearby swing low at 132.55 where further sell stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish High-Wave Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for PepsiCo. Out of 32 times, PEP closed higher 56.25% 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 59.38% with an average market move of 0.76%.