AFG unable to break through key resistance level
American Financial Group Inc. (AFG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
AFG finished Wednesday at 67.99 gaining $1.24 (1.86%), strongly outperforming the S&P 500 (-0.46%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AFG as at Sep 16, 2020):
Wednesday's trading range has been $2.30 (3.44%), that's slightly above the last trading month's daily average range of $2.03. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AFG.
The stock managed to close back above the 20-day moving average at 67.11. Unable to break through the key technical resistance level at 68.90 (R1), American Financial closed below it after spiking up to 69.19 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 66.58 in the prior session, the share found buyers again around the same price level today at 66.89. The last time this happened on September 3rd, AFG gained 2.23% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 69.42 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 66.58 where further sell stops might get triggered. As prices are trading close to September's high at 70.18, upside momentum could speed up should the market mark new highs for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for American Financial. Out of 584 times, AFG closed higher 55.99% 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 63.01% with an average market move of 0.52%.