ESNT plunges, losing $3.09 (-5.94%) within a single day on high volume
Essent Group Ltd. (ESNT) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
ESNT ended the week -5.7% lower at 48.93 after tanking $3.09 (-5.94%) today on high volume, notably underperforming the S&P 500 (0.18%) following today's earnings report. This is the biggest single-day loss in over a year. Today's close at 48.93 marks the lowest recorded closing price since October 14, 2019.
Daily Candlestick Chart (ESNT as at Feb 14, 2020):
ESNT reported earnings of $1.49 per share before today's market open. With analysts having expected an EPS of $1.47, Essent Group Ltd. surpassed market expectations by 1.4%. The company's last earnings report was released on Nov. 8, 2019, when Essent Group Ltd. reported earnings of $1.47 per share beating market expectations by 6.5%.
Friday's trading range has been $3.25 (6.37%), that's far above the last trading month's daily average range of $1.09. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for ESNT.
One bearish candlestick pattern matches today's price action, the Black Candle.
The stock closed below the 200-day moving average at 49.70 for the first time since January 24, 2019. When this moving average was crossed below the last time on November 19, 2018, ESNT lost -3.41% on the following trading day.
Crossing below the lower Bollinger Band for the first time since January 31st, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 51.29 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Essent Group. Out of 99 times, ESNT closed higher 55.56% 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 71.72% with an average market move of 1.71%.