CNC dominated by bears dragging the market lower throughout the day
Centene Corporation (CNC) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CNC ended the week -5.62% lower at 64.84 after losing $0.81 (-1.23%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CNC as at May 22, 2020):
Friday's trading range has been $1.59 (2.4%), that's far below the last trading month's daily average range of $2.58. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CNC.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on April 20th, CNC lost -3.19% on the following trading day.
Prices are trading close to the key technical support level at 63.82 (S1).
Though the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the nearby swing low at 64.15 where further sell stops might get activated. As prices are trading close to May's low at 63.79, downside momentum could accelerate should the market mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Centene. Out of 62 times, CNC closed higher 54.84% 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 67.74% with an average market move of 2.96%.