SQM closes within previous day's range
Sociedad Quimica y Minera S.A. (SQM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SQM finished the week 3.73% higher at 30.57 after losing $0.18 (-0.59%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $0.57 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, SQM actually gained 3.84% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SQM as at Feb 14, 2020):
Friday's trading range has been $1.34 (4.29%), that's above the last trading month's daily average range of $0.97. 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 SQM.
Notwithstanding a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Unable to break through the key technical resistance level at 31.62 (R1), Sociedad Quimica closed below it after spiking up to 31.84 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 30.28 where further sell stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for Sociedad Quimica. Out of 373 times, SQM closed lower 56.84% 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 10 trading days, showing a win rate of 50.13% with an average market move of 0.05%.