PFPT breaks back above 20-day moving average
Proofpoint Inc. (PFPT) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
PFPT ended the week 0.37% higher at 127.15 after gaining $1.08 (0.86%) today, outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $0.83 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 failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (PFPT as at Feb 14, 2020):
Friday's trading range has been $2.39 (1.9%), that's below the last trading month's daily average range of $3.21. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for PFPT. Prices continued to consolidate within a tight trading range between 125.11 and 128.23 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on December 19, 2019, PFPT actually lost -2.07% on the following trading day. Notwithstanding a weak opening the stock managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Proofpoint managed to close back above the 20-day moving average at 126.33. Prices are trading close to the key technical resistance level at 128.28 (R1). The share found buyers again today around 125.11 for the third trading day in a row after having found demand at 125.49 in the previous session and at 125.17 two days ago.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might speed up should prices move above the close-by swing high at 129.45 where further buy stops could get activated. With prices trading close to this year's high at 129.98, upside momentum might accelerate should PFPT be able to break out to new highs for the year.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Proofpoint. Out of 471 times, PFPT closed higher 54.56% 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 61.78% with an average market move of 1.78%.