CHGG still stuck within tight trading range
Chegg Inc. (CHGG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CHGG ended Wednesday at 66.23 losing $0.16 (-0.24%) on low volume, but still slightly outperforming the S&P 500 (-0.46%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CHGG as at Sep 16, 2020):
Wednesday's trading range has been $2.32 (3.47%), that's below the last trading month's daily average range of $3.35. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CHGG. Prices continued to consolidate within a tight trading range between 64.60 and 69.15 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern.
After trading down to 65.27 earlier during the day, Chegg bounced off the key technical support level at 65.39 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move lower than 65.25 in the previous session, the share found buyers again around the same price level today at 65.27. The last time this happened on Monday, CHGG gained 0.58% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could speed up should prices move above the nearby swing high at 69.15 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 64.60 where further sell stops might get activated. As prices are trading close to September's low at 63.52, downside momentum could speed up should the market mark new lows for the month.
Among the six 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 Chegg. Out of 303 times, CHGG closed higher 59.08% 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 52.48% with an average market move of 1.35%.