UA fails to close above 20-day moving average
Under Armour Inc. Class C (UA) Technical Analysis Report for Jul 13, 2020 | by Techniquant Editorial Team
UA finished Monday at 8.46 losing $0.17 (-1.97%), notably underperforming the S&P 500 (-0.94%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (UA as at Jul 13, 2020):
Monday's trading range has been $0.35 (4.04%), that's below the last trading month's daily average range of $0.46. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for UA. Prices continued to consolidate within a tight trading range between 8.21 and 8.71 where it has been caught now for the last three trading days.
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 May 22nd, UA actually gained 6.50% on the following trading day.
Prices are trading close to the key technical support level at 8.23 (S1). After spiking up to 8.71 during the day, the market found resistance at the 20-day moving average at 8.70. After having been unable to move above 8.66 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 8.71.
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the nearby swing low at 8.21 where further sell stops could get triggered. Further selling might move prices lower should the market test June's close-by low at 7.81.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Under Armour. Out of 38 times, UA 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 65.79% with an average market move of 1.58%.