BHGE dominated by bears dragging the market lower throughout the day
Baker Hughes a GE company Class A (BHGE) Technical Analysis Report for Aug 15, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BHGE finished Thursday at 20.71 tanking $1.30 (-5.91%) on high volume, strongly underperforming the S&P 500 (0.25%). Today's close at 20.71 marks the lowest recorded closing price since December 24, 2018. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 21.76, the market confirmed its breakout through the prior session low after trading up to $1.32 below it intraday.
Daily Candlestick Chart (BHGE as at Aug 15, 2019):
Thursday's trading range has been $1.41 (6.48%), that's far above the last trading month's daily average range of $0.87. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for BHGE.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 20.44 earlier during the day, Baker Hughes bounced off the key technical support level at 20.60 (S1). The failure to close below the support could increase that levels importance as support going forward. Unable to break through the key technical resistance level at 21.77 (R1), the stock closed below it after spiking up to 21.85 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on Tuesday, BHGE lost -6.62% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 23.89.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
2018's low at 20.09 is within reach and we could see further downside momentum should the share break out beyond.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(14) below 30" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Baker Hughes. Out of 31 times, BHGE closed lower 58.06% 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 48.39% with an average market move of 0.65%.