SBRY.L closes lower for the 7th day in a row
Sainsbury's (SBRY.L) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 7th day in a row, SBRY.L finished the week -3.21% lower at 305.00 after losing £1.40 (-0.46%) today, slightly underperforming the FTSE 100 (-0.16%). Today's close at 305.00 marks the lowest recorded closing price since June 8th. Trading £4.20 higher after the open, Sainsbury's was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 305.10, the market confirmed its breakout through the previous session low after trading up to £0.50 below it intraday.
Daily Candlestick Chart (SBRY.L as at Oct 12, 2018):
Friday's trading range has been £6.10 (1.99%), that's above the last trading month's daily average range of £5.35. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SBRY.L.
Prices broke below the key technical support level at 305.30 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 305.10 in the prior session, the share found buyers again around the same price level today at 304.60. The last time this happened on Wednesday, SBRY.L actually lost -1.64% 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 while might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 316.10.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "7 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Sainsbury's. Out of 11 times, SBRY.L closed higher 72.73% 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 63.64% with an average market move of 2.35%.