SPLK closes within prior day's range
Splunk Inc. (SPLK) Technical Analysis Report for Mar 25, 2020 | by Techniquant Editorial Team
Moving higher for the 5th day in a row, SPLK ended Wednesday at 122.04 edging higher $0.94 (0.78%) on low volume, slightly underperforming the S&P 500 (1.15%). Trading $6.53 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SPLK as at Mar 25, 2020):
Wednesday's trading range has been $8.95 (7.32%), that's slightly below the last trading month's daily average range of $9.96. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SPLK.
Four candlestick patterns are matching today's price action, the Gravestone Doji, the Northern Doji and the Shooting Star which are known as bearish patterns and one neutral pattern, the Doji. The last time a Doji showed up on March 10th, SPLK lost -8.72% on the following trading day.
Prices are trading close to the key technical support level at 118.66 (S1). After spiking up to 128.86 during the day, the market found resistance at the 20-day moving average at 125.83. After having been unable to move lower than 118.50 in the prior session, Splunk found buyers again around the same price level today at 119.91.
The stock shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Gravestone Doji" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Splunk. Out of 30 times, SPLK closed higher 60.00% 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 63.33% with an average market move of 2.52%.