UNFI breaks back below 20-day moving average
United Natural Foods Inc. (UNFI) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UNFI ended the week 0.94% higher at 7.54 after losing $0.30 (-3.83%) today, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 7.75, United Natural confirmed its breakout through the prior session low after trading up to $0.29 below it intraday.
Daily Candlestick Chart (UNFI as at Feb 14, 2020):
Friday's trading range has been $0.42 (5.35%), that's slightly above the last trading month's daily average range of $0.40. 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 slightly lower than usual for UNFI.
Notwithstanding a strong opening the stock closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
The share closed back below the 20-day moving average at 7.56. When this moving average was crossed below the last time on January 17th, UNFI lost -5.50% on the following trading day.
While the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the nearby swing low at 7.27 where further sell stops might get activated. With prices trading close to this year's low at 6.94, downside momentum could speed up should UNFI break out to new lows for the year. Trading close to December's low at 6.80 we might see further downside momentum if potential sell stops at the level get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for United Natural. Out of 79 times, UNFI closed higher 56.96% of the time on the next trading day after the market condition occurred.