GNW stuck within tight trading range
Genworth Financial Inc (GNW) Technical Analysis Report for Apr 06, 2020 | by Techniquant Editorial Team
GNW finished Monday at 3.39 edging higher $0.06 (1.8%) on low volume, significantly underperforming the S&P 500 (7.03%). 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 (GNW as at Apr 06, 2020):
Monday's trading range has been $0.22 (6.27%), that's far below the last trading month's daily average range of $0.49. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GNW. Prices continued to consolidate within a tight trading range between 3.16 and 3.58 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on March 31st, GNW lost -8.13% on the following trading day.
Prices are trading close to the key technical support level at 3.16 (S1). Prices are trading close to the key technical resistance level at 3.61 (R1).
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 3.58 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 3.16 where further sell stops might get activated. With prices trading close to this year's low at 2.87, downside momentum could accelerate should the stock break out to new lows for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Genworth Financial. Out of 565 times, GNW closed higher 50.44% 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 seven trading days, showing a win rate of 50.97% with an average market move of 0.38%.