CNP dominated by bears dragging the market lower throughout the day
CenterPoint Energy Inc (CNP) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
CNP finished the week -2.18% lower at 26.46 after tanking $0.47 (-1.75%) today, underperforming the S&P 500 (-0.9%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CNP as at Jan 24, 2020):
Friday's trading range has been $0.61 (2.27%), that's above the last trading month's daily average range of $0.44. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CNP.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 26.11 (S1). CenterPoint Energy closed back below the 20-day moving average at 26.77. When this moving average was crossed below the last time on Wednesday, CNP actually gained 2.86% on the following trading day.
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the nearby swing low at 26.11 where further sell stops could get activated. With prices trading close to this year's high at 27.34, upside momentum might speed up should the stock be able to break out to new highs for the year. With prices trading close to this year's low at 25.90, downside momentum could accelerate should the market break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for CenterPoint Energy. Out of 10 times, CNP closed higher 70.00% 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 70.00% with an average market move of 0.54%.