ESS pushes through key technical resistance level
Essex Property Trust Inc. (ESS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
ESS ended the week 4.35% higher at 236.41 after edging higher $0.98 (0.42%) today, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $2.27 lower after the open, the stock 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 (ESS as at May 22, 2020):
Friday's trading range has been $4.12 (1.75%), that's far below the last trading month's daily average range of $8.97. 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 ESS. Prices continued to consolidate within a tight trading range between 230.83 and 244.23 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern.
Buyers managed to take out the key technical resistance level at 235.52 (now S1), which is likely to act as support going forward. The last time this happened on April 14th, ESS actually lost -2.86% on the following trading day. After having been unable to move lower than 233.05 in the prior session, the market found buyers again around the same price level today at 232.83.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 240.67 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 230.83 where further sell stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Essex Property. Out of 767 times, ESS closed higher 52.93% 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 58.80% with an average market move of 0.44%.