DVN still stuck within tight trading range
Devon Energy Corporation (DVN) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
DVN finished Thursday at 7.36 gaining $0.20 (2.79%), significantly underperforming the S&P 500 (6.24%). Trading up to $0.56 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DVN as at Mar 26, 2020):
Thursday's trading range has been $0.85 (11.63%), that's far below the last trading month's daily average range of $1.30. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for DVN. Prices continued to consolidate within a tight trading range between 5.70 and 7.79 where it has been caught now for the whole last trading week.
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, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on Monday, DVN gained 19.90% on the following trading day.
Prices are trading close to the key technical resistance level at 7.79 (R1). The stock ran into sellers again today around 7.60 for the third trading day in a row after having found sellers at 7.79 in the previous session and at 7.63 two days ago.
While the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 7.79 where further buy stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. Its common bearish interpretation has been confirmed for Devon Energy. Out of 110 times, DVN closed lower 57.27% 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 53.64% with an average market move of -1.15%.