HUM finds buyers around 387.35 for the third day in a row
Humana Inc. (HUM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
HUM finished the month 1.21% higher at 392.45 after losing $6.09 (-1.53%) today, strongly underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HUM as at Jul 31, 2020):
Friday's trading range has been $10.76 (2.71%), that's slightly above the last trading month's daily average range of $9.49. 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 lower than usual for HUM. Prices continued to consolidate within a tight trading range between 384.51 and 401.69 where it has been caught now for the whole last trading week.
After trading down to 387.35 earlier during the day, the stock bounced off the key technical support level at 387.41 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Tuesday, HUM gained 2.52% on the following trading day. The share closed back below the 20-day moving average at 393.22. Humana found buyers again today around 387.35 for the third trading day in a row after having found demand at 387.80 in the previous session and at 387.00 two days ago.
Though the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 401.69 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 384.51 where further sell stops could get triggered. With prices trading close to this year's high at 412.70, upside momentum might speed up should HUM be able to break out to new highs for the year. As prices are trading close to July's low at 377.20, downside momentum could accelerate should the stock mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Humana. Out of 751 times, HUM closed higher 55.26% 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 59.79% with an average market move of 1.06%.