SHO closes lower for the 2nd day in a row
Sunstone Hotel Investors Inc. (SHO) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SHO ended the month -8.22% lower at 7.48 after edging lower $0.03 (-0.4%) today, notably underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (SHO as at Jul 31, 2020):
Friday's trading range has been $0.41 (5.48%), that's far above the last trading month's daily average range of $0.30. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for SHO. Prices continued to consolidate within a tight trading range between 7.15 and 7.68 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern, one bearish pattern, the Hanging Man and one neutral pattern, the Doji. The last time a Southern Doji showed up on July 8th, SHO actually lost -1.68% on the following trading day.
After trading down to 7.15 earlier during the day, the share bounced off the key technical support level at 7.38 (S1). The failure to close below the support could increase that levels importance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 7.68 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Sunstone Hotel. Out of 315 times, SHO closed higher 54.29% 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 nine trading days, showing a win rate of 54.29% with an average market move of 0.35%.