SPLK dominated by bears dragging the market lower throughout the day
Splunk Inc. (SPLK) Technical Analysis Report for Apr 01, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SPLK finished Wednesday at 109.69 tanking $16.54 (-13.1%), significantly underperforming the S&P 500 (-4.41%). This is the biggest single-day loss in over two weeks. The last time we've seen such an unusually strong single-day loss on March 16th, SPLK actually gained 14.29% on the following trading day. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (SPLK as at Apr 01, 2020):
Wednesday's trading range has been $11.67 (9.69%), that's above the last trading month's daily average range of $9.85. 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 lower than usual for SPLK.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 105.39 (S1). The share closed back below the 20-day moving average at 119.18 for the first time since March 25th.
Although the stock is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 93.92, downside momentum might speed up should Splunk break out to new lows for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. Its common bearish interpretation has been confirmed for Splunk. Out of 103 times, SPLK closed lower 58.25% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 56.31% with an average market move of -0.33%.