SJM closes above its opening price after recovering from early selling pressure
J.M. Smucker Company (SJM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SJM ended the month 3.35% higher at 109.35 after flat today on high volume, underperforming the S&P 500 (0.77%). Trading up to $1.36 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (SJM as at Jul 31, 2020):
Friday's trading range has been $1.66 (1.52%), that's slightly below the last trading month's daily average range of $1.88. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SJM.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man.
After trading as low as 107.85 during the day, the market found support at the 200-day moving average at 108.27. The last time this happened on June 22nd, SJM actually lost -2.30% on the following trading day. Prices are trading close to the key technical resistance level at 110.25 (R1).
Although the stock is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the close-by swing high at 110.63 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 107.43 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 200" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for J. M. Smucker. Out of 20 times, SJM closed lower 65.00% 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 10 trading days, showing a win rate of 65.00% with an average market move of -0.07%.