PRGO breaks below 200-day moving average for the first time since June 15th
Perrigo Company plc (PRGO) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PRGO finished the month -4.07% lower at 53.02 after tanking $1.76 (-3.21%) today on high volume, significantly underperforming the S&P 500 (0.77%). Today's close at 53.02 marks the lowest recorded closing price since June 15th. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (PRGO as at Jul 31, 2020):
Friday's trading range has been $2.15 (3.94%), that's far above the last trading month's daily average range of $1.27. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PRGO.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 52.01 (S1). Perrigo closed below the 200-day moving average at 53.19 for the first time since June 15th. When this moving average was crossed below the last time on June 11th, PRGO actually gained 0.53% on the following trading day.
Crossing below the lower Bollinger Band for the first time since June 12th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 56.09 or signal the beginning of a strong momentum breakout leading to even lower prices.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Perrigo. Out of 31 times, PRGO closed higher 54.84% 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 64.52% with an average market move of 1.31%.