NAVI finds support at 50-day moving average
Navient Corporation (NAVI) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, NAVI ended Wednesday at 8.58 gaining $0.15 (1.78%) on high volume, strongly outperforming the S&P 500 (-0.46%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (NAVI as at Sep 16, 2020):
Wednesday's trading range has been $0.37 (4.39%), that's above the last trading month's daily average range of $0.30. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NAVI. Prices continued to consolidate within a tight trading range between 8.31 and 8.68 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Even with a weak opening the stock managed to close above the previous day's open and close, forming a bullish Engulfing Candle.
After trading as low as 8.31 during the day, the market found support at the 50-day moving average at 8.33. The last time this happened on June 11th, NAVI gained 4.17% on the following trading day. Unable to break through the key technical resistance level at 8.68 (R1), the share closed below it after spiking up to 8.68 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. After having been unable to move above 8.64 in the prior session, Navient ran into sellers again around the same price level today, failing to move higher than 8.68.
Although NAVI is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Navient. Out of 21 times, NAVI closed lower 61.90% 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 66.67% with an average market move of -2.49%.