CNP closes lower for the 2nd day in a row
CenterPoint Energy Inc (CNP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CNP finished the month 1.82% higher at 19.01 after losing $0.12 (-0.63%) today on high volume, significantly underperforming the S&P 500 (0.77%). Today's close at 19.01 marks the lowest recorded closing price since July 9th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CNP as at Jul 31, 2020):
Friday's trading range has been $0.90 (4.7%), that's far above the last trading month's daily average range of $0.58. 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 CNP.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Takuri Line.
After trading as low as 18.40 during the day, CenterPoint Energy found support at the 50-day moving average at 18.66. Prices broke below the key technical support level at 19.12 (now R1), which is likely to act as resistance going forward. The last time this happened on Monday, CNP actually gained 1.47% on the following trading day. After having been unable to move above 19.22 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 19.30.
Although the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for CenterPoint Energy. Out of 265 times, CNP closed higher 58.49% 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 61.13% with an average market move of 0.71%.