GNW still stuck within tight trading range
Genworth Financial Inc (GNW) Technical Analysis Report for Mar 30, 2020 | by Techniquant Editorial Team
GNW ended Monday at 4.05 gaining $0.30 (8.0%) on low volume, strongly outperforming the S&P 500 (3.35%). Trading up to $0.20 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GNW as at Mar 30, 2020):
Monday's trading range has been $0.31 (7.75%), that's below the last trading month's daily average range of $0.43. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for GNW. Prices continued to consolidate within a tight trading range between 3.44 and 4.24 where it has been caught now for the whole last trading week.
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 March 19th, GNW actually lost -16.92% on the following trading day.
Prices are trading close to the key technical support level at 3.76 (S1). After spiking up to 4.11 during the day, the stock found resistance at the 20-day moving average at 4.09. After having been unable to move lower than 3.73 in the prior session, the share found buyers again around the same price level today at 3.80.
While Genworth Financial is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the nearby swing low at 3.73 where further sell stops might get activated. With prices trading close to this year's high at 4.84, upside momentum could speed up should GNW be able to break out to new highs for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Genworth Financial. Out of 487 times, GNW closed lower 50.31% 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 10 trading days, showing a win rate of 54.62% with an average market move of -0.53%.