SYY finds buyers at key support level
Sysco Corp. (SYY) Technical Analysis Report for Oct 12, 2018
SYY finished the week -4.46% lower at 68.82 after gaining $0.33 (0.48%) today, underperforming the S&P 500 (1.42%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (SYY as at Oct 12, 2018):
Friday's trading range has been $1.18 (1.71%), that's above the last trading month's daily average range of $0.90. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for SYY.
One bullish candlestick pattern matches today's price action, the Hammer.
After trading down to 68.12 earlier during the day, the stock bounced off the key technical support level at 68.16 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on August 24th, SYY actually lost -1.64% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 72.30.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Sysco Corp.. Out of 112 times, SYY closed higher 60.71% 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 50.89% with an average market move of 0.77%.