ULTA closes lower for the 2nd day in a row
Ulta Beauty Inc. (ULTA) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ULTA finished the month -5.13% lower at 192.99 after losing $5.62 (-2.83%) today, significantly underperforming the Nasdaq 100 (1.78%). Closing below Thursday's low at 196.21, Ulta Beauty confirmed its breakout through the prior session low after trading up to $5.37 below it intraday.
Daily Candlestick Chart (ULTA as at Jul 31, 2020):
Friday's trading range has been $8.43 (4.25%), that's far above the last trading month's daily average range of $6.28. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ULTA.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 196.00 (now R1), which is likely to act as resistance going forward. The last time this happened on July 9th, ULTA actually gained 1.92% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Further selling might move prices lower should the market test June's nearby low at 186.01.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Ulta Beauty. Out of 411 times, ULTA closed higher 53.28% 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 59.61% with an average market move of 1.34%.