SNBR runs into sellers again around 47.01
Sleep Number Corporation (SNBR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, SNBR ended the month 11.67% higher at 46.50 after gaining $0.07 (0.15%) today on low volume, underperforming the S&P 500 (0.77%). Trading up to $0.88 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 prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SNBR as at Jul 31, 2020):
Friday's trading range has been $1.43 (3.08%), that's below the last trading month's daily average range of $2.46. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SNBR. Prices continued to consolidate within a tight trading range between 43.77 and 47.05 where it has been caught now for the whole last trading week.
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. Additionally, four candlestick patterns are matching today's price action, the Bearish Doji Star, the Bearish Harami Cross Pattern and the Northern Doji which are known as bearish patterns and one neutral pattern, the Doji. The last time a Bearish Harami Cross Pattern showed up on October 19, 2017, SNBR actually gained 5.33% on the following trading day.
Prices are trading close to the key technical resistance level at 47.43 (R1). After having been unable to move above 47.05 in the previous session, Sleep Number ran into sellers again around the same price level today, missing to move higher than 47.01.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 47.05 where further buy stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Cross Pattern" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Sleep Number. Out of 3 times, SNBR closed higher 100.00% 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 66.67% with an average market move of 1.15%.