AFG closes above its opening price after recovering from early selling pressure
American Financial Group Inc. (AFG) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, AFG ended Thursday at 71.94 edging higher $0.87 (1.22%), notably underperforming the S&P 500 (6.24%). Trading up to $5.15 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on March 17th, AFG actually lost -22.70% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (AFG as at Mar 26, 2020):
Thursday's trading range has been $7.22 (10.27%), that's slightly above the last trading month's daily average range of $6.75. 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 AFG.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man.
Although American Financial is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 74.50 where further buy stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for American Financial. Out of 81 times, AFG closed higher 55.56% 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 64.20% with an average market move of 0.47%.