SPLK breaks below Wednesday's low
Splunk Inc. (SPLK) Technical Analysis Report for Feb 20, 2020 | by Techniquant Editorial Team
SPLK finished Thursday at 173.41 losing $0.76 (-0.44%), slightly underperforming the S&P 500 (-0.38%). Closing below Wednesday's low at 173.66, the market confirmed its breakout through the previous session low after trading up to $5.54 below it intraday.
Daily Candlestick Chart (SPLK as at Feb 20, 2020):
Thursday's trading range has been $7.14 (4.1%), that's far above the last trading month's daily average range of $4.51. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for SPLK.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Hanging Man which are both known as bearish patterns. The last time a Bearish Spinning Top showed up on February 11th, SPLK actually gained 1.04% on the following trading day.
After trading down to 168.12 earlier during the day, the share bounced off the key technical support level at 171.17 (S1). The failure to close below the support might increase that levels importance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 176.31 where further buy stops might get activated.
Among the five 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 Splunk. Out of 329 times, SPLK closed higher 62.61% 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 57.14% with an average market move of 1.78%.