CF closes above its opening price after recovering from early selling pressure
CF Industries Holdings Inc. (CF) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CF finished Wednesday at 33.35 gaining $0.38 (1.15%), strongly outperforming the S&P 500 (-0.46%). Trading up to $0.43 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CF as at Sep 16, 2020):
Wednesday's trading range has been $1.03 (3.11%), that's slightly above the last trading month's daily average range of $0.91. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CF. Prices continued to consolidate within a tight trading range between 32.65 and 33.80 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on August 18th, CF actually lost -2.64% on the following trading day.
The stock managed to close back above the 20-day moving average at 33.12. Prices are trading close to the key technical resistance level at 34.05 (R1). The market ran into sellers again today around 33.68 for the third trading day in a row after having found sellers at 33.74 in the previous session and at 33.80 two days ago.
Though CF is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 33.80 where further buy stops might get triggered. As prices are trading close to September's high at 34.17, upside momentum could speed up should the share mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for CF. Out of 431 times, CF closed higher 54.52% 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 55.68% with an average market move of 0.48%.