NRG pops to highest close since February 25th
NRG Energy Inc. (NRG) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NRG finished the week 9.57% higher at 35.72 after gaining $0.42 (1.19%) today on low volume, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 35.72 marks the highest recorded closing price since February 25th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (NRG as at May 22, 2020):
Friday's trading range has been $0.65 (1.84%), that's far below the last trading month's daily average range of $1.21. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NRG.
Three candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and one bearish pattern, the Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on January 23rd, NRG lost -2.34% on the following trading day.
Buyers managed to take out the key technical resistance level at 35.50 (now S1), which is likely to act as support going forward. After having been unable to move lower than 35.23 in the previous session, the stock found buyers again around the same price level today at 35.08.
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 close-by swing high at 36.78 where further buy stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for NRG Energy. Out of 82 times, NRG closed lower 58.54% 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 three trading days, showing a win rate of 57.32% with an average market move of -0.05%.