AEE breaks below key technical support level
Ameren Corporation (AEE) Technical Analysis Report for Sep 10, 2019 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, AEE finished Tuesday at 74.21 losing $0.97 (-1.29%), strongly underperforming the S&P 500 (0.03%). Today's close at 74.21 marks the lowest recorded closing price since May 31st.
Daily Candlestick Chart (AEE as at Sep 10, 2019):
Tuesday's trading range has been $1.46 (1.95%), that's above the last trading month's daily average range of $1.14. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for AEE.
After trading down to 73.31 earlier during the day, Ameren bounced off the key technical support level at 73.50 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on September 5th, AEE actually lost -1.23% on the following trading day. Prices broke below the key technical support level at 74.63 (now R1), which is likely to act as resistance going forward.
Crossing below the lower Bollinger Band for the first time since August 6th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 76.41 or signal the beginning of a strong momentum breakout leading to even lower prices.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Gap Down" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Ameren. Out of 53 times, AEE closed higher 56.60% 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 66.04% with an average market move of 1.36%.