NVT finds support at 100-day moving average
nVent Electric plc (NVT) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NVT ended the month -3.04% lower at 18.16 after losing $0.29 (-1.57%) today on high volume, significantly underperforming the S&P 500 (0.77%) following today's earnings report. Today's close at 18.16 marks the lowest recorded closing price since July 9th. Trading $0.71 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 18.24, nVent Electric confirmed its breakout through the prior session low after trading up to $0.69 below it intraday.
Daily Candlestick Chart (NVT as at Jul 31, 2020):
NVT reported earnings of $0.29 per share before today's market open. With analysts having expected an EPS of $0.23, nVent Electric plc surpassed market expectations by 26.1%. The company's last earnings report was released on April 29, 2020, when nVent Electric plc reported earnings of $0.34 per share.
Friday's trading range has been $1.44 (7.88%), that's far above the last trading month's daily average range of $0.66. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NVT.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
After trading as low as 17.55 during the day, the share found support at the 100-day moving average at 18.01. The last time this happened on June 9th, NVT actually lost -4.04% on the following trading day. Unable to break through the key technical resistance level at 18.79 (R1), the stock closed below it after spiking up to 18.99 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move above 19.02 in the previous session, NVT ran into sellers again around the same price level today, failing to move higher than 18.99.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 100" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for nVent Electric. Out of 5 times, NVT closed lower 60.00% 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 10 trading days, showing a win rate of 80.00% with an average market move of -10.09%.