CI finds buyers at key support level
Cigna Corporation (CI) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CI ended Wednesday at 168.59 gaining $2.09 (1.26%) on high volume, notably outperforming the S&P 500 (-0.46%). Trading $3.05 higher after the open, the share was unable to hold its gains as the bears took control ending the day below 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 (CI as at Sep 16, 2020):
Wednesday's trading range has been $4.63 (2.75%), that's slightly above the last trading month's daily average range of $4.61. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CI.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, four candlestick patterns are matching today's price action, the Bullish Harami Cross Pattern and the Southern Doji which are both known as bullish patterns, one bearish pattern, the Gravestone Doji and one neutral pattern, the Doji.
After trading down to 167.02 earlier during the day, Cigna bounced off the key technical support level at 167.71 (S1). The failure to close below the support could increase that levels significance as support going forward.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 175.55. The last time this happened on Monday, CI actually lost -3.11% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 165.98 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Cigna. Out of 660 times, CI closed higher 55.91% 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 61.52% with an average market move of 1.08%.