SCI still stuck within tight trading range
Service Corporation International (SCI) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, SCI ended the week 7.76% higher at 38.73 after gaining $1.57 (4.22%) today, significantly outperforming the S&P 500 (-3.37%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 37.86, the market confirmed its breakout through the previous session high after trading up to $1.71 above it intraday.
Daily Candlestick Chart (SCI as at Mar 27, 2020):
Friday's trading range has been $3.56 (9.8%), that's slightly above the last trading month's daily average range of $3.38. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for SCI. Prices continued to consolidate within a tight trading range between 35.01 and 39.57 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern. The last time a Bearish Hikkake Pattern showed up on Tuesday, SCI lost -4.51% on the following trading day.
Unable to break through the key technical resistance level at 39.20 (R1), the stock closed below it after spiking up to 39.57 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. Service was bought again around 36.01 after having seen lows at 35.76, 35.59 and 35.77 in the last three trading sessions. Obviously there is something going on at that level.
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 Support/Resistance based market condition "Low close to prior three Lows" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Service. Out of 16 times, SCI closed lower 56.25% 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 eight trading days, showing a win rate of 75.00% with an average market move of -0.14%.