CMS still stuck within tight trading range
CMS Energy Corporation (CMS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CMS ended the week 3.56% higher at 55.59 after gaining $0.85 (1.55%) today on low volume, significantly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bulls were in full control today, moving the market higher throughout the whole session. 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 (CMS as at May 22, 2020):
Friday's trading range has been $0.96 (1.75%), that's below the last trading month's daily average range of $1.47. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CMS. Prices continued to consolidate within a tight trading range between 54.68 and 56.44 where it has been caught now for the whole last trading week.
In spite of a weak opening the share managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a White Candle showed up on Monday, CMS actually lost -1.39% on the following trading day.
Prices are trading close to the key technical resistance level at 55.92 (R1). After having been unable to move lower than 54.70 in the prior session, the stock found buyers again around the same price level today at 54.68.
Though CMS Energy is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 56.44 where further buy stops might get triggered. As prices are trading close to May's high at 57.70, upside momentum could speed up should the market mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for CMS Energy. Out of 61 times, CMS closed higher 57.38% 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 68.85% with an average market move of 1.44%.