URBN unable to break through key resistance level
Urban Outfitters Inc. (URBN) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
URBN ended the week 3.12% higher at 17.17 after losing $0.46 (-2.61%) today, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. 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 May 22, 2020):
Friday's trading range has been $1.17 (6.57%), that's slightly above the last trading month's daily average range of $1.16. 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 URBN.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Unable to break through the key technical resistance level at 17.84 (R1), Urban Outfitters closed below it after spiking up to 18.07 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move above 18.12 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 18.07. The last time this happened on Tuesday, URBN lost -7.75% on the following trading day.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the close-by swing high at 18.12 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 16.01 where further sell stops might get triggered. Further buying could move prices higher should the market test April's close-by high at 19.25.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for Urban Outfitters. Out of 393 times, URBN closed lower 54.45% 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 52.93% with an average market move of -0.63%.