SAFM finds buyers again around 138.75
Sanderson Farms Inc. (SAFM) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
SAFM ended Tuesday at 139.50 edging lower $0.02 (-0.01%) on high volume, slightly underperforming the S&P 500 (0.05%). Trading $0.65 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (SAFM as at Apr 16, 2019):
Tuesday's trading range has been $1.61 (1.15%), that's far below the last trading month's daily average range of $3.21. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for SAFM.
Despite a strong opening Sanderson Farms closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After having been unable to move lower than 138.75 in the prior session, the market found buyers again around the same price level today at 138.75. The last time this happened on April 10th, SAFM gained 3.20% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 131.45.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 141.37 where further buy stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Sanderson Farms. Out of 90 times, SAFM closed higher 54.44% 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 62.22% with an average market move of 1.33%.