PKG unable to break through key resistance level
Packaging Corporation of America (PKG) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, PKG ended the week -2.41% lower at 98.94 after losing $1.04 (-1.04%) today, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing below Thursday's low at 99.77, the share confirmed its breakout through the prior session low after trading up to $0.97 below it intraday.
Daily Candlestick Chart (PKG as at Feb 14, 2020):
Friday's trading range has been $1.68 (1.68%), that's slightly below the last trading month's daily average range of $2.13. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PKG.
One bearish candlestick pattern matches today's price action, the Black Candle.
Unable to break through the key technical resistance level at 100.28 (R1), the market closed below it after spiking up to 100.48 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 January 29th, PKG lost -5.07% on the following trading day.
While the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 95.00, downside momentum could speed up should Packaging break out to new lows for the year. As prices are trading close to February's low at 95.57, downside momentum might accelerate should PKG mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Packaging. Out of 394 times, PKG closed higher 57.36% 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 61.42% with an average market move of 1.22%.