EV closes within prior day's range
Eaton Vance Corporation (EV) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, EV ended Thursday at 33.19 gaining $2.35 (7.62%) on low volume, significantly outperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EV as at Mar 26, 2020):
Thursday's trading range has been $4.09 (13.97%), that's above the last trading month's daily average range of $3.05. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EV.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
Buyers managed to take out the key technical resistance level at 32.87 (now S1), which is likely to act as support going forward. The last time this happened on Tuesday, EV gained 8.06% on the following trading day. After having been unable to move lower than 28.86 in the prior session, the share found buyers again around the same price level today at 29.27.
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Eaton Vance. Out of 58 times, EV closed higher 56.90% 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 55.17% with an average market move of 0.36%.