NEE tanks, losing $15.35 (-5.19%) within a single day on high volume
NextEra Energy Inc. (NEE) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
NEE ended Wednesday at 280.35 tanking $15.35 (-5.19%) on high volume, notably underperforming the S&P 500 (-0.46%). This is the biggest single-day loss in over five months. The last time we've seen such an unusually strong single-day loss on September 3rd, NEE lost -1.17% on the following trading day. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (NEE as at Sep 16, 2020):
Wednesday's trading range has been $7.82 (2.75%), that's above the last trading month's daily average range of $5.98. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NEE.
Two candlestick patterns are matching today's price action, the Bearish Abandoned Baby and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 275.45 (S1). The stock closed back below the 20-day moving average at 281.20.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 281.20.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 275.45 where further sell stops could get triggered. As prices are trading close to September's low at 272.79, downside momentum might speed up should NextEra Energy mark new lows for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for NextEra Energy. Out of 432 times, NEE closed higher 59.03% 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 64.81% with an average market move of 0.94%.