HIG unable to break through key resistance level
Hartford Financial Services Group Inc. (HIG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
HIG finished Wednesday at 38.14 gaining $0.66 (1.76%) on high volume, significantly outperforming the S&P 500 (-0.46%). Trading up to $0.47 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 missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HIG as at Sep 16, 2020):
Wednesday's trading range has been $1.28 (3.39%), that's slightly above the last trading month's daily average range of $1.26. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for HIG.
Unable to break through the key technical resistance level at 38.18 (R1), Hartford Financial closed below it after spiking up to 38.53 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 37.44 in the prior session, the stock found buyers again around the same price level today at 37.25.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 40.17. The last time this happened on Monday, HIG actually lost -3.63% on the following trading day.
Though the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Trading close to July's low at 35.70 we could see further downside momentum if potential sell stops at the level get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Hartford Financial. Out of 535 times, HIG closed higher 54.58% 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 53.27% with an average market move of 0.55%.