SO closes within prior day's range after lackluster session
Southern Company (SO) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
SO finished the week 0.94% higher at 69.02 after losing $0.52 (-0.75%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. 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 (SO as at Feb 14, 2020):
Friday's trading range has been $0.47 (0.68%), that's far below the last trading month's daily average range of $0.84. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for SO.
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. After moving higher in the previous session, the stock closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on January 8th, SO actually gained 1.05% on the following trading day.
The share closed back below the 20-day moving average at 69.20.
Although the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 69.67 where further buy stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Southern. Out of 58 times, SO closed higher 56.90% 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 62.07% with an average market move of 0.58%.