EWBC closes below its opening price unable to hold early session gains
East West Bancorp Inc. (EWBC) Technical Analysis Report for Sep 21, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EWBC ended Monday at 32.91 tanking $1.37 (-4.0%), strongly underperforming the S&P 500 (-1.16%). Today's close at 32.91 marks the lowest recorded closing price since July 9th. Trading $1.15 higher after the open, East West was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 3rd, EWBC actually gained 2.44% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (EWBC as at Sep 21, 2020):
Monday's trading range has been $2.04 (6.12%), that's far above the last trading month's daily average range of $1.23. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EWBC.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices broke below the key technical support level at 33.10 (now R1), which is likely to act as resistance going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to July's low at 32.34 we could see further downside momentum if potential sell stops at the level get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for East West. Out of 275 times, EWBC closed higher 57.09% 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 57.09% with an average market move of 0.83%.