CINF unable to break through key resistance level
Cincinnati Financial Corporation (CINF) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CINF ended Thursday at 78.72 gaining $4.49 (6.05%) on low volume, slightly underperforming the S&P 500 (6.24%). Trading up to $2.99 lower after the open, Cincinnati Financial 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 (CINF as at Mar 26, 2020):
Thursday's trading range has been $7.24 (9.61%), that's slightly above the last trading month's daily average range of $6.86. 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 notably higher than usual for CINF. Prices continued to consolidate within a tight trading range between 69.53 and 79.92 where it has been caught now for the last three trading days.
After trading down to 72.33 earlier during the day, the market bounced off the key technical support level at 73.11 (S1). The failure to close below the support might increase that levels significance as support going forward. Unable to break through the key technical resistance level at 79.35 (R1), the share closed below it after spiking up to 79.57 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. The stock ran into sellers again today around 79.57 for the third trading day in a row after having found sellers at 79.92 in the previous session and at 79.20 two days ago. The last time this happened on March 19th, CINF lost -8.42% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 79.92 where further buy stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Cincinnati Financial. Out of 131 times, CINF closed higher 51.91% 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 63.36% with an average market move of 0.91%.