STZ closes above its opening price after recovering from early selling pressure
Constellation Brands Inc. (STZ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
STZ ended the week 8.72% higher at 172.31 after gaining $1.31 (0.77%) today, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $2.71 lower after the open, the market managed to reverse during the session as bulls took control ending the day above 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 (STZ as at May 22, 2020):
Friday's trading range has been $4.66 (2.73%), that's slightly below the last trading month's daily average range of $5.38. 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 STZ. Prices continued to consolidate within a tight trading range between 168.16 and 173.62 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on April 8th, STZ gained 5.37% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern.
Prices are trading close to the key technical resistance level at 173.62 (R1). After having been unable to move lower than 168.29 in the prior session, the share found buyers again around the same price level today at 168.16.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the nearby swing high at 173.62 where further buy stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Constellation Brands. Out of 82 times, STZ closed higher 50.00% 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 69.51% with an average market move of 1.43%.