UAA tumbles $0.94 (-8.21%) after posting strong earnings
Under Armour Inc. Class A (UAA) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UAA finished the month 7.91% higher at 10.51 after tanking $0.94 (-8.21%) today on high volume, significantly underperforming the S&P 500 (0.77%) following today's earnings report. This is the biggest single-day loss in over a month. Trading $0.61 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (UAA as at Jul 31, 2020):
UAA reported earnings of $-0.31 per share before today's market open. With analysts having expected an EPS of $-0.4, Under Armour Inc. Class A beat market expectations by 22.5%. The company's last earnings report was released on May 11, 2020, when Under Armour Inc. Class A reported earnings of $-0.34 per share failing market expectations by -78.9%.
Friday's trading range has been $1.60 (14.17%), that's far above the last trading month's daily average range of $0.53. 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 UAA.
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.
After trading as low as 10.30 during the day, the stock found support at the 20-day moving average at 10.31. Unable to break through the key technical resistance level at 11.31 (R2), Under Armour closed below it after spiking up to 11.90 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on February 11th, UAA actually gained 2.71% on the following trading day. The market ran into sellers again today around 11.90 for the third trading day in a row after having found sellers at 11.84 in the previous session and at 11.84 two days ago.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the 15 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R2" stand out. Its common bearish interpretation has been confirmed for Under Armour. Out of 13 times, UAA closed lower 53.85% 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 92.31% with an average market move of -7.37%.