BTU breaks below key technical support level
Peabody Energy Corporation (BTU) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BTU ended Thursday at 2.84 losing $0.28 (-8.97%) on high volume, strongly underperforming the S&P 500 (6.24%). Closing below Wednesday's low at 3.00, the share confirmed its breakout through the prior session low after trading up to $0.44 below it intraday.
Daily Candlestick Chart (BTU as at Mar 26, 2020):
Thursday's trading range has been $0.70 (22.29%), that's slightly below the last trading month's daily average range of $0.76. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for BTU.
Prices broke below the key technical support level at 2.92 (now R1), which is likely to act as resistance going forward. The last time this happened on December 17, 2019, BTU actually gained 0.73% on the following trading day.
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 2.51, downside momentum could speed up should Peabody Energy break out to new lows for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Peabody Energy. Out of 61 times, BTU closed higher 63.93% 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 five trading days, showing a win rate of 63.93% with an average market move of 0.23%.