CF breaks back below 20-day moving average
CF Industries Holdings Inc. (CF) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
CF ended Wednesday at 42.64 losing $0.27 (-0.63%) on high volume, underperforming the S&P 500 (0.3%). 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 (CF as at Feb 13, 2019):
Wednesday's trading range has been $0.89 (2.06%), that's below the last trading month's daily average range of $1.28. 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 CF.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on February 7th, CF actually gained 1.33% on the following trading day.
Prices are trading close to the key technical support level at 42.04 (S1). The stock closed back below the 20-day moving average at 42.65.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 43.98 where further buy stops might get activated. With prices trading close to this year's low at 40.34, downside momentum could speed up should the market break out to new lows for the year. As prices are trading close to February's high at 43.98, upside momentum might accelerate should the share mark new highs for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for CF. Out of 145 times, CF closed higher 52.41% 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 61.38% with an average market move of 1.23%.