HUM unable to break through key resistance level
Humana Inc. (HUM) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, HUM finished Wednesday at 399.07 losing $0.92 (-0.23%) on low volume, but still slightly outperforming the S&P 500 (-0.46%). Trading $2.60 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on August 28th, HUM actually gained 1.75% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (HUM as at Sep 16, 2020):
Wednesday's trading range has been $7.44 (1.84%), that's below the last trading month's daily average range of $10.02. 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 higher than usual for HUM. Prices continued to consolidate within a tight trading range between 394.26 and 407.00 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. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 396.82 (S1). Unable to break through the key technical resistance level at 404.74 (R1), the market closed below it after spiking up to 406.08 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. Humana ran into sellers again today around 406.08 for the third trading day in a row after having found sellers at 407.00 in the previous session and at 406.24 two days ago.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 407.00 where further buy stops might get triggered.
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 417 times, HUM closed higher 59.47% 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 63.79% with an average market move of 1.29%.