SAN dominated by bears dragging the market lower throughout the day
Banco Santander S.A. Sponsored ADR (SAN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, SAN finished the month -12.45% lower at 2.11 after tanking $0.14 (-6.22%) today, notably underperforming the S&P 500 (0.77%). This is the biggest single-day loss in over a month. Today's close at 2.11 marks the lowest recorded closing price since May 22nd. 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 (SAN as at Jul 31, 2020):
Friday's trading range has been $0.08 (3.67%), that's above the last trading month's daily average range of $0.06. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for SAN.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 2.14 (now R1), which is likely to act as resistance going forward. The last time this happened on July 9th, SAN actually gained 3.72% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 2.44.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Banco Santander. Out of 162 times, SAN closed higher 58.64% 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 56.79% with an average market move of 0.77%.