CNP stuck within tight trading range
CenterPoint Energy Inc (CNP) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
CNP finished the week 0.71% higher at 16.92 after gaining $0.16 (0.95%) today, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. 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 (CNP as at May 22, 2020):
Friday's trading range has been $0.25 (1.49%), that's far below the last trading month's daily average range of $0.67. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CNP. Prices continued to consolidate within a tight trading range between 16.70 and 17.30 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, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Buyers managed to take out the key technical resistance level at 16.80 (now S1), which is likely to act as support going forward. The last time this happened on May 14th, CNP actually lost -2.78% on the following trading day. After having been unable to move lower than 16.70 in the prior session, CenterPoint Energy found buyers again around the same price level today at 16.72.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could accelerate should prices move below the close-by swing low at 16.70 where further sell stops might get activated. As prices are trading close to May's low at 15.75, downside momentum could speed up should the share 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 "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for CenterPoint Energy. Out of 86 times, CNP closed higher 58.14% 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 62.79% with an average market move of 0.43%.