NKTR breaks back below 50-day moving average
Nektar Therapeutics (NKTR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
NKTR finished the month -4.32% lower at 22.16 after tanking $1.11 (-4.77%) today on high volume, significantly underperforming the S&P 500 (0.77%). This is the biggest single-day loss in over a month. Today's close at 22.16 marks the lowest recorded closing price since June 26th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 22.23, Nektar Therapeutics confirmed its breakout through the previous session low after trading up to $0.16 below it intraday.
Daily Candlestick Chart (NKTR as at Jul 31, 2020):
Friday's trading range has been $1.26 (5.4%), that's far above the last trading month's daily average range of $0.89. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NKTR.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 21.88 (S1). The stock closed back below the 50-day moving average at 22.89. When this moving average was crossed below the last time on Wednesday, NKTR actually gained 2.42% on the following trading day.
Crossing below the lower Bollinger Band for the first time since Wednesday, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 23.80 or signal the beginning of a strong momentum breakout leading to even lower prices.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Nektar Therapeutics. Out of 78 times, NKTR closed higher 62.82% 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 nine trading days, showing a win rate of 52.56% with an average market move of 0.85%.