CF still stuck within tight trading range
CF Industries Holdings Inc. (CF) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
CF finished the month 11.34% higher at 31.33 after gaining $0.52 (1.69%) today on high volume, outperforming the S&P 500 (0.77%). Closing above Thursday's high at 31.13, the stock confirmed its breakout through the previous session high after trading up to $0.45 above it intraday.
Daily Candlestick Chart (CF as at Jul 31, 2020):
Friday's trading range has been $1.01 (3.29%), that's slightly below the last trading month's daily average range of $1.07. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CF. Prices continued to consolidate within a tight trading range between 30.03 and 31.75 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
Unable to break through the key technical resistance level at 31.48 (R1), the market closed below it after spiking up to 31.58 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on Wednesday, CF lost -1.75% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 30.10 where further sell stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Its common bearish interpretation has been confirmed for CF. Out of 36 times, CF closed lower 63.89% 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 63.89% with an average market move of -1.09%.