SAFM finds buyers at key support level
Sanderson Farms Inc. (SAFM) Technical Analysis Report for Jul 12, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SAFM finished the week -5.03% lower at 135.26 after losing $1.56 (-1.14%) today, strongly underperforming the S&P 500 (0.46%). Closing below Thursday's low at 136.52, the stock confirmed its breakout through the prior session low after trading up to $4.11 below it intraday.
Daily Candlestick Chart (SAFM as at Jul 12, 2019):
Friday's trading range has been $4.48 (3.27%), that's slightly above the last trading month's daily average range of $4.05. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SAFM.
After trading down to 132.41 earlier during the day, the share bounced off the key technical support level at 132.55 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Monday, SAFM gained 0.44% on the following trading day. Sanderson Farms closed back below the 100-day moving average at 136.62 for the first time since June 27th.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Sanderson Farms. Out of 470 times, SAFM closed higher 56.38% 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 57.66% with an average market move of 0.82%.