GBT finds buyers around 68.37 for the third day in a row
Global Blood Therapeutics Inc. (GBT) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GBT ended the week -4.5% lower at 69.42 after edging higher $0.62 (0.9%) today on low volume, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.98 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 failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (GBT as at May 22, 2020):
Friday's trading range has been $1.36 (1.96%), that's far below the last trading month's daily average range of $4.07. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GBT. Prices continued to consolidate within a tight trading range between 68.31 and 70.96 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving lower in the prior session, Global Blood managed to close higher but below the previous day's open, forming a bullish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top and the Takuri Line which are both known as bullish patterns. The last time a Bullish Spinning Top showed up on May 14th, GBT gained 4.48% on the following trading day.
After trading down to 68.37 earlier during the day, the stock bounced off the key technical support level at 69.30 (S1). The failure to close below the support could increase that levels significance as support going forward. The market found buyers again today around 68.37 for the third trading day in a row after having found demand at 68.31 in the prior session and at 68.54 two days ago.
GBT shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the close-by swing low at 68.31 where further sell stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Takuri Line" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Global Blood. Out of 23 times, GBT closed lower 56.52% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 69.57% with an average market move of -0.50%.