SO stuck within tight trading range
Southern Company (SO) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, SO finished the month -9.15% lower at 51.85 after gaining $0.29 (0.56%) today, underperforming the S&P 500 (1.54%). Trading up to $0.52 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (SO as at Jun 30, 2020):
Tuesday's trading range has been $1.03 (1.99%), that's far below the last trading month's daily average range of $1.72. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SO. Prices continued to consolidate within a tight trading range between 50.40 and 52.16 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern. The last time a Bullish Spinning Top showed up on March 25th, SO gained 9.97% on the following trading day.
Prices are trading close to the key technical resistance level at 52.85 (R1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 50.40 where further sell stops might get activated. Trading close to April's low at 49.26 we could see further downside momentum if potential sell stops at the level get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Southern. Out of 684 times, SO closed higher 55.99% 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 59.80% with an average market move of 0.45%.