VFC breaks back below 50-day moving average
V.F. Corporation (VFC) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
VFC finished the week 7.08% higher at 55.64 after losing $0.65 (-1.15%) today, notably 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 (VFC as at May 22, 2020):
Friday's trading range has been $2.28 (4.03%), that's slightly below the last trading month's daily average range of $2.30. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for VFC.
Despite a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle.
V. F. closed back below the 50-day moving average at 55.84. When this moving average was crossed below the last time on Tuesday, VFC actually gained 2.08% on the following trading day. The market was sold again around 56.74 after having seen highs at 56.82, 56.69 and 56.75 in the last three trading sessions. Obviously there is something going on at that level.
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 56.82 where further buy stops might get activated. As prices are trading close to May's high at 59.21, upside momentum could speed up should VFC mark new highs for the month.
Among the seven 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 V. F.. Out of 92 times, VFC closed higher 57.61% 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 58.70% with an average market move of 0.77%.