NSC closes below its opening price unable to hold early session gains
Norfolk Southern Corporation (NSC) Technical Analysis Report for Jul 07, 2020 | by Techniquant Editorial Team
NSC ended Tuesday at 174.12 losing $4.50 (-2.52%), strongly underperforming the S&P 500 (-1.08%). Trading $2.10 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 2nd, NSC actually gained 2.36% 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 (NSC as at Jul 07, 2020):
Tuesday's trading range has been $4.50 (2.55%), that's slightly below the last trading month's daily average range of $5.40. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NSC.
The market closed back below the 50-day moving average at 175.36.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 179.66 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 170.79 where further sell stops might get activated. Further selling could move prices lower should the market test June's close-by low at 166.00.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Norfolk Southern. Out of 671 times, NSC closed higher 54.10% 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 60.06% with an average market move of 1.01%.