BHF breaks below key technical support level
Brighthouse Financial Inc. (BHF) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
BHF finished the week -0.59% lower at 40.75 after tanking $0.75 (-1.81%) today on low volume, underperforming the S&P 500 (-0.9%). This is the biggest single-day loss in over two weeks. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (BHF as at Jan 24, 2020):
Friday's trading range has been $1.18 (2.84%), that's far above the last trading month's daily average range of $0.87. 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 lower than usual for BHF.
Two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns. The last time a Bearish Belt-hold showed up on October 30, 2019, BHF lost -1.90% on the following trading day.
Prices are trading close to the key technical support level at 40.34 (S1). Prices broke below the key technical support level at 41.36 (now R1), which is likely to act as resistance going forward. After having been unable to move above 41.55 in the previous session, Brighthouse Financial ran into sellers again around the same price level today, missing to move higher than 41.56.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might speed up should prices move below the nearby swing low at 39.88 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. Its common bearish interpretation has been confirmed for Brighthouse Financial. Out of 9 times, BHF closed lower 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 short side has been after 10 trading days, showing a win rate of 66.67% with an average market move of -5.65%.