HUM stuck within tight trading range
Humana Inc. (HUM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
HUM finished the week -0.95% lower at 394.43 after edging lower $0.84 (-0.21%) today on low volume, slightly underperforming 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 (HUM as at May 22, 2020):
Friday's trading range has been $8.13 (2.05%), that's far below the last trading month's daily average range of $13.89. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HUM. Prices continued to consolidate within a tight trading range between 387.41 and 400.87 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
After trading down to 389.60 earlier during the day, the stock bounced off the key technical support level at 392.58 (S1). The failure to close below the support could increase that levels importance as support going forward. The share was bought again around 389.60 after having seen lows at 387.41, 389.51 and 387.99 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on February 19th, HUM actually lost -1.99% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the nearby swing low at 387.41 where further sell stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous three Lows" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Humana. Out of 31 times, HUM closed lower 64.52% 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 10 trading days, showing a win rate of 54.84% with an average market move of -0.28%.