SYY closes lower for the 2nd day in a row
Sysco Corporation (SYY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SYY ended the week 8.67% higher at 51.75 after losing $0.73 (-1.39%) today on low volume, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 52.14, the stock confirmed its breakout through the previous session low after trading up to $0.97 below it intraday.
Daily Candlestick Chart (SYY as at May 22, 2020):
Friday's trading range has been $1.63 (3.09%), that's below the last trading month's daily average range of $2.47. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SYY.
Notwithstanding a strong opening Sysco closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on April 30th, SYY lost -6.24% on the following trading day.
Prices are trading close to the key technical support level at 49.92 (S1). The share closed back below the 20-day moving average at 52.22.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 53.84 where further buy stops might get activated. As prices are trading close to May's high at 55.50, upside momentum could speed up should SYY mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Sysco. Out of 292 times, SYY closed higher 54.45% 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 58.56% with an average market move of 0.66%.