DVN breaks back below 100-day moving average
Devon Energy Corporation (DVN) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
DVN ended the week -0.65% lower at 22.82 after losing $0.48 (-2.06%) today, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DVN as at Feb 14, 2020):
Friday's trading range has been $1.03 (4.39%), that's far above the last trading month's daily average range of $0.75. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DVN.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Despite a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on January 17th, DVN lost -3.33% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The stock closed back below the 100-day moving average at 23.11.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling could accelerate should prices move below the nearby swing low at 22.33 where further sell stops might get activated. With prices trading close to this year's low at 21.15, downside momentum could speed up should Devon Energy break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 100" stand out. Its common bearish interpretation has been confirmed for Devon Energy. Out of 53 times, DVN closed lower 52.83% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 64.15% with an average market move of -2.19%.