SRG stuck within tight trading range
Seritage Growth Properties Class A (SRG) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
SRG ended the week -4.47% lower at 13.47 after edging lower $0.06 (-0.44%) today, slightly underperforming the S&P 500 (0.01%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SRG as at Oct 16, 2020):
Friday's trading range has been $0.46 (3.4%), that's far below the last trading month's daily average range of $0.73. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SRG. Prices continued to consolidate within a tight trading range between 13.01 and 13.71 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After spiking up to 13.66 during the day, the stock found resistance at the 20-day moving average at 13.57. The last time this happened on May 26th, SRG actually gained 14.98% on the following trading day. After having been unable to move above 13.58 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 13.66.
While Seritage Growth is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the nearby swing low at 13.01 where further sell stops could get activated. Further selling might move prices lower should the market test September's close-by low at 12.22.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Seritage Growth. Out of 111 times, SRG closed higher 54.05% 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 54.95% with an average market move of 1.53%.