NSC breaks below Tuesday's low
Norfolk Southern Corporation (NSC) Technical Analysis Report for Jul 01, 2020 | by Techniquant Editorial Team
NSC ended Wednesday at 171.52 losing $4.05 (-2.31%) on low volume, strongly underperforming the S&P 500 (0.5%). Closing below Tuesday's low at 171.90, Norfolk Southern confirmed its breakout through the previous session low after trading up to $1.11 below it intraday.
Daily Candlestick Chart (NSC as at Jul 01, 2020):
Wednesday's trading range has been $6.84 (3.89%), that's above the last trading month's daily average range of $5.64. 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 NSC.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Notwithstanding a strong opening the share closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The stock closed back below the 50-day moving average at 174.22. After having been unable to move above 176.93 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 177.63. The last time this happened on Monday, NSC actually gained 1.67% on the following trading day.
NSC shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might speed up should prices move below the close-by swing low at 166.00 where further sell stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Norfolk Southern. Out of 94 times, NSC closed higher 55.32% 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 70.21% with an average market move of 1.42%.