PKG falls to lowest close since July 9th
Packaging Corporation of America (PKG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, PKG ended the month -3.69% lower at 96.12 after losing $2.16 (-2.2%) today, strongly underperforming the S&P 500 (0.77%). Today's close at 96.12 marks the lowest recorded closing price since July 9th. Closing below Thursday's low at 97.71, the share confirmed its breakout through the prior session low after trading up to $3.10 below it intraday.
Daily Candlestick Chart (PKG as at Jul 31, 2020):
Friday's trading range has been $3.56 (3.63%), that's above the last trading month's daily average range of $2.77. Weekly volatility is also higher, being above 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.
After trading as low as 94.61 during the day, Packaging found support at the 100-day moving average at 94.90. The last time this happened on June 25th, PKG actually lost -0.26% on the following trading day.
Although the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Further selling could move prices lower should the market test June's nearby low at 93.38.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Packaging. Out of 380 times, PKG closed higher 55.26% 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 58.68% with an average market move of 0.85%.