WEN finds buyers again around 22.65
Wendy's Company (WEN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
WEN ended the month 6.43% higher at 23.18 after edging higher $0.03 (0.13%) today, underperforming the S&P 500 (0.77%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (WEN as at Jul 31, 2020):
Friday's trading range has been $0.62 (2.66%), that's slightly below the last trading month's daily average range of $0.63. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for WEN.
Prices are trading close to the key technical resistance level at 23.37 (R1). After having been unable to move lower than 22.74 in the prior session, the market found buyers again around the same price level today at 22.65. The last time this happened on July 24th, WEN gained 1.58% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 23.89 where further buy stops could get activated. With prices trading close to this year's high at 24.04, upside momentum might speed up should the share be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Wendy's. Out of 618 times, WEN closed higher 50.65% 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 53.40% with an average market move of 0.60%.