UA pushes through key technical resistance level
Under Armour Inc. Class C (UA) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
UA ended the week -14.02% lower at 15.45 after gaining $0.32 (2.12%) today, strongly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bulls were in full control today, moving the market higher throughout the whole session. 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 (UA as at Feb 14, 2020):
Friday's trading range has been $0.35 (2.31%), that's far below the last trading month's daily average range of $0.56. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for UA. Prices continued to consolidate within a tight trading range between 15.08 and 15.90 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving lower in the previous session, Under Armour managed to close higher but below the prior day's open, forming a bullish Harami Candle. The last time this candlestick pattern showed up on Monday, UA actually lost -16.69% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Buyers managed to take out the key technical resistance level at 15.42 (now S1), which is likely to act as support going forward. The market found buyers again today around 15.15 for the third trading day in a row after having found demand at 15.08 in the previous session and at 15.20 two days ago.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 17.75.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 15.90 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 15.08 where further sell stops might get triggered.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Under Armour. Out of 43 times, UA closed lower 60.47% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after five trading days, showing a win rate of 58.14% with an average market move of -0.64%.