STZ finds support at 200-day moving average
Constellation Brands Inc. (STZ) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, STZ ended the month 1.86% higher at 178.20 after losing $2.63 (-1.45%) today, significantly underperforming the S&P 500 (0.77%). Closing below Thursday's low at 178.82, Constellation Brands confirmed its breakout through the prior session low after trading up to $3.08 below it intraday.
Daily Candlestick Chart (STZ as at Jul 31, 2020):
Friday's trading range has been $5.17 (2.87%), that's far above the last trading month's daily average range of $3.70. 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 STZ.
After trading as low as 175.74 during the day, the share found support at the 200-day moving average at 176.80. The market closed below the 50-day moving average at 178.47 for the first time since June 26th. When this moving average was crossed below the last time on June 26th, STZ actually gained 3.07% on the following trading day.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 182.30 where further buy stops might get activated. As prices are trading close to July's low at 175.40, downside momentum could accelerate should STZ mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Constellation Brands. Out of 412 times, STZ closed higher 58.01% 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 62.14% with an average market move of 1.39%.