FE closes within prior day's range after lackluster session
FirstEnergy Corp. (FE) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, FE finished the week 3.44% higher at 40.64 after gaining $0.21 (0.52%) today, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (FE as at May 22, 2020):
Friday's trading range has been $0.51 (1.26%), that's far below the last trading month's daily average range of $1.10. 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 FE. Prices continued to consolidate within a tight trading range between 40.03 and 41.28 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Bullish Short Candle, the Tweezer Top and the White Candle which are known as bullish patterns. The last time a Bullish Short Candle showed up on April 16th, FE gained 3.01% on the following trading day.
FirstEnergy managed to close back above the 50-day moving average at 40.58. The market ran into sellers again today around 40.73 for the third trading day in a row after having found sellers at 40.73 in the prior session and at 40.84 two days ago.
While 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 41.28 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 40.03 where further sell stops might get triggered. As prices are trading close to May's high at 42.28, upside momentum could speed up should the stock mark new highs for the month.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for FirstEnergy. Out of 605 times, FE 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 56.69% with an average market move of 0.18%.