URBN breaks back above 20-day moving average
Urban Outfitters Inc. (URBN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
URBN ended the month 8.67% higher at 16.54 after gaining $0.29 (1.78%) today, significantly outperforming the S&P 500 (0.77%). Trading up to $0.43 lower after the open, the share managed to reverse during the session as bulls took control ending the day above 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 Jul 31, 2020):
Friday's trading range has been $0.73 (4.49%), that's slightly below the last trading month's daily average range of $0.84. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for URBN.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
The stock managed to close back above the 20-day moving average at 16.33. When this moving average was crossed above the last time on Wednesday, URBN actually lost -6.23% on the following trading day. Prices are trading close to the key technical resistance level at 16.69 (R1).
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 17.36 where further buy stops might get triggered. As prices are trading close to July's high at 17.55, upside momentum could accelerate should Urban Outfitters mark new highs for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near high of period" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Urban Outfitters. Out of 551 times, URBN closed lower 52.09% 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 54.63% with an average market move of -0.82%.