EQR breaks below key technical support level
Equity Residential of Beneficial Interest (EQR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
EQR ended the month -8.82% lower at 53.63 after losing $0.32 (-0.59%) today, strongly underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (EQR as at Jul 31, 2020):
Friday's trading range has been $1.41 (2.62%), that's slightly below the last trading month's daily average range of $1.44. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EQR. Prices continued to consolidate within a tight trading range between 52.58 and 55.06 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Takuri Line which are both known as bullish patterns.
Prices broke below the key technical support level at 53.79 (now R1), which is likely to act as resistance going forward. The last time this happened on Monday, EQR actually gained 2.49% on the following trading day. The market found buyers again today around 52.58 for the third trading day in a row after having found demand at 52.69 in the previous session and at 52.67 two days ago.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 55.06 where further buy stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for Equity Residential. Out of 597 times, EQR closed higher 53.10% 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 58.46% with an average market move of 0.32%.