ES misses to close above 20-day moving average
Eversource Energy (ES) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ES finished the week 2.71% higher at 78.46 after losing $0.36 (-0.46%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading $0.95 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Tuesday, ES actually gained 1.50% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (ES as at May 22, 2020):
Friday's trading range has been $1.80 (2.28%), that's below the last trading month's daily average range of $2.49. 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 ES. Prices continued to consolidate within a tight trading range between 77.93 and 80.33 where it has been caught now for the whole last trading week.
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. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After spiking up to 79.75 during the day, the market found resistance at the 20-day moving average at 79.35. Eversource Energy was bought again around 77.95 after having seen lows at 78.30, 78.31 and 77.98 in the last three trading sessions. Obviously there is something going on at that level.
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 accelerate should prices move above the nearby swing high at 80.17 where further buy stops might get activated. As prices are trading close to May's high at 82.55, upside momentum could speed up should ES mark new highs for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Its common bullish interpretation has been confirmed for Eversource Energy. Out of 17 times, ES closed higher 58.82% 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 58.82% with an average market move of 1.05%.