SNE finds buyers at key support level
Sony Corporation (SNE) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
SNE finished the week -1.2% lower at 63.24 after gaining $0.50 (0.8%) today, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.61 lower after the open, the market 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 missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SNE as at May 22, 2020):
Friday's trading range has been $0.73 (1.16%), that's far below the last trading month's daily average range of $1.10. 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 SNE.
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, two candlestick patterns are matching today's price action, the Bullish Spinning Top and the Takuri Line which are both known as bullish patterns. The last time a Takuri Line showed up on March 13th, SNE actually lost -8.24% on the following trading day.
After trading down to 62.59 earlier during the day, the share bounced off the key technical support level at 62.69 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move above 63.38 in the previous session, Sony ran into sellers again around the same price level today, failing to move higher than 63.32.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the close-by swing high at 64.56 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 62.18 where further sell stops could get activated. As prices are trading close to May's low at 61.35, downside momentum might speed up should SNE mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Sony. Out of 304 times, SNE closed higher 62.50% 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 50.33% with an average market move of 0.31%.