CNC breaks back below 20-day moving average
Centene Corporation (CNC) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
CNC ended the month 2.68% higher at 65.25 after losing $1.56 (-2.33%) today, notably underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CNC as at Jul 31, 2020):
Friday's trading range has been $2.19 (3.29%), that's above the last trading month's daily average range of $1.86. 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 slightly lower than usual for CNC. Prices continued to consolidate within a tight trading range between 64.28 and 66.86 where it has been caught now for the last three trading days.
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, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 64.28 (S1). The market closed back below the 20-day moving average at 65.68. When this moving average was crossed below the last time on Tuesday, CNC actually gained 3.29% on the following trading day. The stock was sold again around 66.64 after having seen highs at 66.86, 66.76 and 66.71 in the last three trading sessions. Obviously there is something going on at that level.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might accelerate should prices move above the nearby swing high at 66.86 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 64.28 where further sell stops could get activated. As prices are trading close to July's low at 62.18, downside momentum might accelerate should the share mark new lows for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. Its common bullish interpretation has been confirmed for Centene. Out of 90 times, CNC closed higher 57.78% 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 74.44% with an average market move of 2.76%.