URBN unable to break through key resistance level
Urban Outfitters Inc. (URBN) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
URBN finished Thursday at 15.78 edging lower $0.23 (-1.44%) on low volume, strongly underperforming the S&P 500 (6.24%). Trading $0.69 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (URBN as at Mar 26, 2020):
Thursday's trading range has been $1.63 (10.16%), that's slightly above the last trading month's daily average range of $1.61. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for URBN.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns. The last time a Bearish Spinning Top showed up on March 6th, URBN lost -12.64% on the following trading day.
Unable to break through the key technical resistance level at 16.39 (R1), the stock closed below it after spiking up to 16.74 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 14.90 in the previous session, the share found buyers again around the same price level today at 15.11.
While Urban Outfitters is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish High-Wave Candle" stand out. Its common bearish interpretation has been confirmed for Urban Outfitters. Out of 27 times, URBN closed lower 55.56% 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 51.85% with an average market move of -2.43%.