NBR finds buyers at key support level
Nabors Industries Ltd. (NBR) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
NBR finished the week 4.61% higher at 2.27 after gaining $0.01 (0.44%) today on low volume, slightly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (NBR as at Feb 14, 2020):
Friday's trading range has been $0.10 (4.39%), that's below the last trading month's daily average range of $0.14. 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 NBR.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Hanging Man which are both known as bearish patterns.
After trading down to 2.19 earlier during the day, Nabors bounced off the key technical support level at 2.19 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on January 17th, NBR actually lost -4.12% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the nearby swing high at 2.38 where further buy stops could get triggered. With prices trading close to this year's low at 2.00, downside momentum might speed up should the stock break out to new lows for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Nabors. Out of 57 times, NBR closed higher 57.89% 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 52.63% with an average market move of 1.30%.