NAVI breaks back below 50-day moving average
Navient Corporation (NAVI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NAVI ended the week 4.34% higher at 6.97 after losing $0.21 (-2.92%) today on low volume, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 7.00, Navient confirmed its breakout through the prior session low after trading up to $0.07 below it intraday.
Daily Candlestick Chart (NAVI as at May 22, 2020):
Friday's trading range has been $0.37 (5.11%), that's below the last trading month's daily average range of $0.51. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NAVI.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Even with a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
The stock closed back below the 50-day moving average at 7.16. When this moving average was crossed below the last time on February 24th, NAVI lost -6.04% on the following trading day. The share was sold again around 7.30 after having seen highs at 7.24, 7.27 and 7.32 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 7.37 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 6.87 where further sell stops might get triggered. As prices are trading close to May's high at 7.88, upside momentum could speed up should NAVI mark new highs for the month. Further selling might move prices lower should the market test April's close-by low at 5.92.
Among the 15 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. Its common bearish interpretation has been confirmed for Navient. Out of 101 times, NAVI closed lower 60.40% 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 65.35% with an average market move of -1.90%.