WBA stuck within tight trading range
Walgreens Boots Alliance Inc. (WBA) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
WBA ended the week -5.21% lower at 44.00 after losing $1.67 (-3.66%) today on low volume, but still slightly outperforming the Nasdaq 100 (-3.91%). Trading $1.01 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on March 3rd, WBA actually gained 5.57% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (WBA as at Mar 27, 2020):
Friday's trading range has been $1.70 (3.82%), that's far below the last trading month's daily average range of $3.97. 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 WBA. Prices continued to consolidate within a tight trading range between 41.00 and 45.85 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Unable to break through the key technical resistance level at 44.61 (R1), the stock closed below it after spiking up to 45.53 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. The market was sold again around 45.53 after having seen highs at 45.85, 45.45 and 45.94 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 45.85 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 41.00 where further sell stops could get triggered. With prices trading close to this year's low at 40.52, downside momentum might accelerate should Walgreens Boots break out to new lows for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Walgreens Boots. Out of 532 times, WBA closed higher 55.45% 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 55.64% with an average market move of 0.42%.