NLY ends the day on a bearish note closing near the low of the day
Annaly Capital Management Inc (NLY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
NLY finished the month 12.96% higher at 7.41 after losing $0.07 (-0.94%) today, strongly underperforming the S&P 500 (0.77%). The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (NLY as at Jul 31, 2020):
Friday's trading range has been $0.24 (3.16%), that's far above the last trading month's daily average range of $0.17. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NLY.
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. The last time this happened on July 24th, NLY actually gained 1.68% on the following trading day. In spite of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After having been unable to move lower than 7.41 in the prior session, the share found buyers again around the same price level today at 7.39.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Annaly Capital. Out of 546 times, NLY closed higher 55.86% 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 three trading days, showing a win rate of 58.61% with an average market move of 0.10%.