RAD rockets, gaining $0.86 (7.15%) within a single day on high volume
Rite Aid Corporation (RAD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
RAD finished Wednesday at 12.88 surging $0.86 (7.15%) on high volume, strongly outperforming the S&P 500 (-0.46%). This is the biggest single-day gain in over two months. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 12.48, the stock confirmed its breakout through the previous session high after trading up to $0.52 above it intraday.
Daily Candlestick Chart (RAD as at Sep 16, 2020):
Wednesday's trading range has been $1.17 (9.69%), that's far above the last trading month's daily average range of $0.61. 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 RAD.
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. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 12.57 (now S1), which is likely to act as support going forward. After spiking up to 13.00 during the day, the share found resistance at the 20-day moving average at 12.97. The last time this happened on August 5th, RAD lost -2.83% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 13.59 where further buy stops might get triggered. As prices are trading close to September's high at 13.59, upside momentum could accelerate should Rite Aid mark new highs for the month.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Outside Bar" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Rite Aid. Out of 59 times, RAD closed lower 59.32% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 64.41% with an average market move of -0.71%.