BHF pushes through key technical resistance level
Brighthouse Financial Inc. (BHF) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
BHF ended the month 1.87% higher at 28.34 after edging higher $0.03 (0.11%) today on low volume, underperforming the S&P 500 (0.77%). Trading up to $0.36 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (BHF as at Jul 31, 2020):
Friday's trading range has been $0.57 (2.02%), that's far below the last trading month's daily average range of $1.15. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for BHF.
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. In spite of a weak opening the market managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the Hammer.
Buyers managed to take out the key technical resistance level at 28.33 (now S1), which is likely to act as support going forward. After having been unable to move above 28.44 in the previous session, Brighthouse Financial ran into sellers again around the same price level today, failing to move higher than 28.39. The last time this happened on Wednesday, BHF lost -2.78% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the nearby swing high at 29.16 where further buy stops could get activated. Selling might accelerate should prices move below the close-by swing low at 27.33 where further sell stops could get triggered. As prices are trading close to July's high at 30.00, upside momentum might speed up should the stock mark new highs for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hammer" stand out. Its common bullish interpretation has been confirmed for Brighthouse Financial. Out of 3 times, BHF closed higher 100.00% 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 33.33% with an average market move of 3.30%.