AEM dominated by bears dragging the market lower throughout the day
Agnico Eagle Mines Limited (AEM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, AEM finished the week -14.22% lower at 49.87 after tanking $9.24 (-15.63%) today on high volume, significantly underperforming the S&P 500 (0.18%) following Thursday's earnings report. This is the biggest single-day loss in over eight years. The last time we've seen such an unusually strong single-day loss on January 28th, AEM actually gained 2.03% on the following trading day. Today's close at 49.87 marks the lowest recorded closing price since June 19, 2019. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (AEM as at Feb 14, 2020):
AEM reported earnings of $0.37 per share after Thursday's market close. With analysts having expected an EPS of $0.35, Agnico Eagle Mines Limited surpassed market expectations by 5.7%. The company's last earnings report was released on Oct. 23, 2019, when Agnico Eagle Mines Limited reported earnings of $0.37 per share beating market expectations by 37.0%.
Friday's trading range has been $3.17 (6.07%), that's far above the last trading month's daily average range of $1.61. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for AEM.
One bearish candlestick pattern matches today's price action, the Black Candle.
The share closed below the 200-day moving average at 55.10 for the first time since January 24, 2019.
Crossing below the lower Bollinger Band for the first time since April 22, 2019, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 59.80 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 17 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for Agnico Eagle. Out of 19 times, AEM closed lower 52.63% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 63.16% with an average market move of -1.69%.