ES closes within previous day's range
Eversource Energy (ES) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
ES finished the month 8.17% higher at 90.07 after losing $0.51 (-0.56%) today on high volume, significantly underperforming the S&P 500 (0.77%) following Thursday's earnings report. Trading $1.58 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (ES as at Jul 31, 2020):
ES reported earnings of $0.75 per share after Thursday's market close. With analysts having expected an EPS of $0.75, Eversource Energy met market expectations. The company's last earnings report was released on May 6, 2020, when Eversource Energy reported earnings of $1.02 per share meeting market expectations.
Friday's trading range has been $3.55 (3.93%), that's far above the last trading month's daily average range of $2.14. 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 higher than usual for ES.
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. The last time this happened on July 24th, ES lost -0.87% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
Unable to break through the key technical resistance level at 91.00 (R1), the market closed below it after spiking up to 91.96 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might speed up should prices move below the nearby swing low at 87.80 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Eversource Energy. Out of 129 times, ES closed higher 55.04% 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 62.02% with an average market move of 0.91%.