POOL breaks back below 20-day moving average
Pool Corporation (POOL) Technical Analysis Report for Apr 03, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, POOL ended the week -4.66% lower at 178.27 after losing $14.85 (-7.69%) today, significantly underperforming the S&P 500 (-1.51%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 183.13, the market confirmed its breakout through the prior session low after trading up to $6.94 below it intraday.
Daily Candlestick Chart (POOL as at Apr 03, 2020):
Friday's trading range has been $14.43 (7.57%), that's slightly below the last trading month's daily average range of $15.24. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for POOL.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 169.35 (S1). The share closed back below the 20-day moving average at 189.54 for the first time since March 27th. When this moving average was crossed below the last time on March 6th, POOL lost -5.29% on the following trading day.
Though Pool is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could speed up should prices move below the close-by swing low at 169.11 where further sell stops might get triggered. With prices trading close to this year's low at 160.35, downside momentum could accelerate should the stock break out to new lows for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Pool. Out of 61 times, POOL closed higher 60.66% 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 77.05% with an average market move of 1.93%.