SO breaks back below 100-day moving average
Southern Company (SO) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SO ended the month 5.32% higher at 54.61 after losing $0.63 (-1.14%) today on high volume, notably underperforming the S&P 500 (0.77%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SO as at Jul 31, 2020):
Friday's trading range has been $1.21 (2.21%), that's slightly above the last trading month's daily average range of $1.21. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SO.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading as low as 53.77 during the day, the stock found support at the 20-day moving average at 54.09. The last time this happened on April 30th, SO actually lost -4.09% on the following trading day. The market closed back below the 100-day moving average at 54.77.
Although Southern is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 55.64 where further buy stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for Southern. Out of 253 times, SO closed higher 51.78% 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 61.26% with an average market move of 0.42%.