YUM closes lower for the 2nd day in a row
Yum! Brands Inc. (YUM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, YUM finished the week 2.77% higher at 87.25 after losing $0.76 (-0.86%) today, significantly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (YUM as at May 22, 2020):
Friday's trading range has been $2.38 (2.69%), that's slightly below the last trading month's daily average range of $2.67. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for YUM. Prices continued to consolidate within a tight trading range between 85.46 and 88.47 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on May 12th, YUM lost -4.24% on the following trading day. Regardless of a strong opening Yum! Brands closed below the prior day's open and close, forming a bearish Engulfing Candle.
The market was sold again around 88.47 after having seen highs at 88.27, 88.45 and 88.18 in the last three trading sessions. Obviously there is something going on at that level.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might accelerate should prices move below the close-by swing low at 85.46 where further sell stops could get activated. Further buying might move prices higher should the market test April's nearby high at 90.53.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous two Highs" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Yum! Brands. Out of 122 times, YUM closed higher 54.10% 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 69.67% with an average market move of 0.95%.