SO unable to break through key resistance level
Southern Company (SO) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, SO finished Wednesday at 53.29 gaining $0.28 (0.53%), outperforming the S&P 500 (-0.46%). Today's close at 53.29 marks the highest recorded closing price since August 17th. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SO as at Sep 16, 2020):
Wednesday's trading range has been $1.02 (1.93%), that's slightly above the last trading month's daily average range of $0.99. Weekly volatility is also higher, being slightly above 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 Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on July 21st, SO actually gained 1.66% on the following trading day.
Unable to break through the key technical resistance level at 53.77 (R1), the share closed below it after spiking up to 53.82 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 52.74 in the prior session, Southern found buyers again around the same price level today at 52.80.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
As prices are trading close to September's high at 53.94, upside momentum might speed up should the stock mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Southern. Out of 551 times, SO closed higher 54.45% 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 58.62% with an average market move of 0.39%.