SQM pushes through Wednesday's high
Sociedad Quimica y Minera S.A. (SQM) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, SQM finished Thursday at 22.60 gaining $0.57 (2.59%), notably underperforming the S&P 500 (6.24%). Trading up to $0.38 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Wednesday's high at 22.53, Sociedad Quimica confirmed its breakout through the previous session high after trading up to $0.32 above it intraday.
Daily Candlestick Chart (SQM as at Mar 26, 2020):
Thursday's trading range has been $0.96 (4.31%), that's far below the last trading month's daily average range of $1.89. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for SQM.
After spiking up to 22.85 during the day, the stock found resistance at the 20-day moving average at 22.78. After having been unable to move above 22.53 in the prior session, the share ran into sellers again around the same price level today, failing to move higher than 22.85. The last time this happened on March 19th, SQM lost -6.25% on the following trading day.
Though SQM is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Sociedad Quimica. Out of 48 times, SQM closed higher 56.25% 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 52.08% with an average market move of 0.85%.