PEP closes above its opening price after recovering from early selling pressure
PepsiCo Inc. (PEP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PEP finished the month 4.08% higher at 137.66 after edging lower $0.03 (-0.02%) today, notably underperforming the Nasdaq 100 (1.78%). Trading up to $2.06 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (PEP as at Jul 31, 2020):
Friday's trading range has been $2.50 (1.82%), that's slightly above the last trading month's daily average range of $2.34. 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 slightly lower than usual for PEP.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading as low as 135.20 during the day, the share found support at the 20-day moving average at 135.30. The last time this happened on July 20th, PEP gained 0.99% on the following trading day. Prices are trading close to the key technical resistance level at 138.00 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 139.00 where further buy stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for PepsiCo. Out of 291 times, PEP closed higher 53.61% 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 58.08% with an average market move of 0.37%.