FANG still stuck within tight trading range
Diamondback Energy Inc. (FANG) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
FANG finished the week 10.73% higher at 42.94 after edging higher $0.05 (0.12%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $1.19 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (FANG as at May 22, 2020):
Friday's trading range has been $1.62 (3.81%), that's below the last trading month's daily average range of $2.84. 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 FANG. Prices continued to consolidate within a tight trading range between 41.38 and 44.24 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on April 30th, FANG lost -7.49% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 44.24 where further buy stops might get triggered. As prices are trading close to May's high at 45.88, upside momentum could accelerate should the stock mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near high of period" stand out. Its common bullish interpretation has been confirmed for Diamondback Energy. Out of 404 times, FANG closed higher 52.23% 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 56.93% with an average market move of 1.40%.