HUM finds buyers around 388.89 for the forth day in a row
Humana Inc. (HUM) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
HUM finished Tuesday at 391.18 losing $3.37 (-0.85%), significantly underperforming the S&P 500 (0.36%) ahead of Wednesday's earnings report. Trading $4.42 higher after the open, Humana was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (HUM as at Aug 04, 2020):
HUM is set to report earnings before tomorrow's market open. For the upcoming report, analysts expect the company to have earned $10.33 per share. The company's last earnings report was released on April 29, 2020, when Humana Inc. reported earnings of $5.4 per share topping market expectations by 11.3%.
Tuesday's trading range has been $7.48 (1.91%), that's below the last trading month's daily average range of $9.55. 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 387.00 and 401.69 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bearish Hikkake Pattern and the Bearish Spinning Top which are both known as bearish patterns. The last time a Bearish Hikkake Pattern showed up on July 16th, HUM actually gained 2.17% on the following trading day.
Prices are trading close to the key technical support level at 387.99 (S1). The market closed back below the 20-day moving average at 393.10. The stock was bought again around 388.89 after having seen lows at 387.90, 387.35 and 387.80 in the last three trading sessions. Obviously there is something going on at that level.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the nearby swing low at 387.35 where further sell stops might get activated. Further selling could move prices lower should the market test July's close-by low at 377.20.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Humana. Out of 419 times, HUM closed higher 58.95% 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 63.48% with an average market move of 1.28%.