SJM runs into sellers around 106.44 for the third day in a row


J.M. Smucker Company (SJM) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team

Highlights

SJM breaks below key technical support level
SJM runs into sellers around 106.44 for the third day in a row
SJM finds buyers at key support level
SJM closes lower for the 2nd day in a row
SJM stuck within tight trading range

Overview

Moving lower for the 2nd day in a row, SJM finished Thursday at 103.47 losing $1.72 (-1.64%), notably underperforming the S&P 500 (6.24%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.

Daily Candlestick Chart (SJM as at Mar 26, 2020):

Daily technical analysis candlestick chart for J.M. Smucker Company (SJM) as at Mar 26, 2020

Thursday's trading range has been $5.13 (4.88%), that's slightly below the last trading month's daily average range of $6.89. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for SJM. Prices continued to consolidate within a tight trading range between 96.84 and 106.59 where it has been caught now for the last three trading days.

During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.

After trading down to 101.31 earlier during the day, the share bounced off the key technical support level at 101.43 (S1). The failure to close below the support could increase that levels significance as support going forward. Prices broke below the key technical support level at 104.94 (now R1), which is likely to act as resistance going forward. The last time this happened on Monday, SJM actually gained 10.38% on the following trading day. The market ran into sellers again today around 106.44 for the third trading day in a row after having found sellers at 106.59 in the previous session and at 106.34 two days ago.

Though the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.

Buying could speed up should prices move above the close-by swing high at 106.59 where further buy stops might get triggered. With prices trading close to this year's low at 91.88, downside momentum could accelerate should J. M. Smucker break out to new lows for the year.

Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for J. M. Smucker. Out of 157 times, SJM closed higher 57.96% 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 61.15% with an average market move of 0.97%.


Market Conditions for SJM as at Mar 26, 2020

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