CB breaks below key technical support level
Chubb Limited (CB) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, CB finished the week -6.11% lower at 126.25 after losing $0.57 (-0.45%) today on high volume, strongly underperforming the S&P 500 (1.42%). Today's close at 126.25 marks the lowest recorded closing price since June 27th. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CB as at Oct 12, 2018):
Friday's trading range has been $4.19 (3.3%), that's far above the last trading month's daily average range of $2.27. 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 CB.
Two candlestick patterns are matching today's price action, the Takuri Line which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on September 17th, CB actually gained 0.22% on the following trading day.
After trading down to 123.68 earlier during the day, the market bounced off the key technical support level at 123.96 (S1). The failure to close below the support might increase that levels importance as support going forward. Prices broke below the key technical support level at 126.69 (now R1), which is likely to act as resistance going forward.
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 while could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 134.88.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "52 Week Low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Chubb Corp.. Out of 12 times, CB closed higher 58.33% 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 91.67% with an average market move of 7.30%.