SKX breaks below Thursday's low
Skechers U.S.A. Inc. (SKX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SKX ended the week -4.25% lower at 37.83 after losing $0.93 (-2.4%) today, notably underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 38.48, the market confirmed its breakout through the previous session low after trading up to $0.85 below it intraday.
Daily Candlestick Chart (SKX as at Feb 14, 2020):
Friday's trading range has been $1.37 (3.53%), that's slightly above the last trading month's daily average range of $1.33. 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 slightly higher than usual for SKX.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Prices are trading close to the key technical support level at 37.58 (S1). After spiking up to 39.00 during the day, the share found resistance at the 20-day moving average at 38.97. The last time this happened on January 16th, SKX lost -2.51% on the following trading day. After having been unable to move above 39.20 in the prior session, Skechers U. S. A. ran into sellers again around the same price level today, missing to move higher than 39.00.
The stock shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling could speed up should prices move below the close-by swing low at 37.60 where further sell stops might get activated. With prices trading close to this year's low at 37.37, downside momentum could accelerate should SKX break out to new lows for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Skechers U. S. A.. Out of 308 times, SKX closed higher 53.57% 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 55.19% with an average market move of 1.63%.