SNA finds buyers at key support level
Snap-On Incorporated (SNA) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
SNA finished Wednesday at 149.09 tanking $3.87 (-2.53%) on high volume, significantly underperforming the S&P 500 (-0.46%). This is the biggest single-day loss in over two months.
Daily Candlestick Chart (SNA as at Sep 16, 2020):
Wednesday's trading range has been $4.90 (3.25%), that's far above the last trading month's daily average range of $3.39. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SNA.
After trading down to 146.34 earlier during the day, Snap-On Incorporated bounced off the key technical support level at 146.89 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on September 11th, SNA gained 3.39% on the following trading day. The market closed back below the 20-day moving average at 149.76.
While the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the nearby swing low at 146.06 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Gap Down" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Snap-On Incorporated. Out of 95 times, SNA closed higher 55.79% 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 66.32% with an average market move of 1.62%.