CHKP runs into sellers around 122.01 for the third day in a row
Check Point Software Technologies Ltd. (CHKP) Technical Analysis Report for Oct 27, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, CHKP ended Tuesday at 119.46 losing $0.54 (-0.45%), significantly underperforming the Nasdaq 100 (0.82%). Today's close at 119.46 marks the lowest recorded closing price since October 2nd. Trading $1.81 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below 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 (CHKP as at Oct 27, 2020):
Tuesday's trading range has been $2.69 (2.24%), that's slightly below the last trading month's daily average range of $2.70. 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 CHKP.
Prices are trading close to the key technical support level at 117.59 (S1). Check Point closed below the 100-day moving average at 119.77 for the first time since June 24th. When this moving average was crossed below the last time on June 24th, CHKP actually gained 1.30% on the following trading day. The market ran into sellers again today around 122.01 for the third trading day in a row after having found sellers at 121.48 in the previous session and at 121.92 two days ago.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could accelerate should prices move below the close-by swing low at 118.27 where further sell stops might get triggered. Further selling could move prices lower should the market test September's nearby low at 114.89.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Check Point. Out of 59 times, CHKP closed higher 54.24% 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 66.10% with an average market move of 1.65%.