UA closes lower for the 2nd day in a row
Under Armour Inc. Class C (UA) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UA ended the month 7.35% higher at 9.49 after tanking $0.69 (-6.78%) today on high volume, strongly underperforming the S&P 500 (0.77%) following today's earnings report. This is the biggest single-day loss in over a month. Closing below Thursday's low at 10.08, the stock confirmed its breakout through the prior session low after trading up to $0.77 below it intraday.
Daily Candlestick Chart (UA as at Jul 31, 2020):
UA reported earnings of $-0.31 per share before today's market open. The company's last earnings report was released on May 11, 2020, when Under Armour Inc. Class C reported earnings of $-0.34 per share.
Friday's trading range has been $1.33 (13.03%), that's far above the last trading month's daily average range of $0.45. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for UA.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Despite a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on July 20th, UA actually gained 7.03% on the following trading day.
After trading down to 9.31 earlier during the day, Under Armour bounced off the key technical support level at 9.45 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices broke below the key technical support level at 10.17 (now R1), which is likely to act as resistance going forward.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for Under Armour. Out of 15 times, UA closed lower 80.00% 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 10 trading days, showing a win rate of 66.67% with an average market move of -4.97%.