CB crashes -2.12% on high volume
Chubb Limited (CB) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 7th day in a row, CB finished the month 0.49% higher at 127.24 after tanking $2.76 (-2.12%) today on high volume, notably underperforming the S&P 500 (0.77%). This is the biggest single-day loss in over three weeks. The last time we've seen such an unusually strong single-day loss on June 11th, CB actually gained 3.50% on the following trading day. Today's close at 127.24 marks the lowest recorded closing price since July 9th. Closing below Thursday's low at 128.52, Chubb confirmed its breakout through the previous session low after trading up to $2.97 below it intraday.
Daily Candlestick Chart (CB as at Jul 31, 2020):
Friday's trading range has been $4.14 (3.2%), that's above the last trading month's daily average range of $3.24. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CB.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 125.55 earlier during the day, the stock bounced off the key technical support level at 125.57 (S1). The failure to close below the support might increase that levels significance as support going forward. The share closed below the 50-day moving average at 128.61 for the first time since May 20th.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to July's low at 122.43, downside momentum could speed up should CB mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Chubb. Out of 194 times, CB closed higher 60.82% 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 61.34% with an average market move of 0.12%.