PFG breaks below key technical support level
Principal Financial Group (PFG) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, PFG ended the week -8.1% lower at 55.14 after losing $0.48 (-0.86%) today on high volume, notably underperforming the S&P 500 (1.42%). Today's close at 55.14 marks the lowest recorded closing price since September 13th. Closing below Thursday's low at 55.52, the stock confirmed its breakout through the previous session low after trading up to $1.38 below it intraday.
Daily Candlestick Chart (PFG as at Oct 12, 2018):
Friday's trading range has been $2.65 (4.67%), that's far above the last trading month's daily average range of $1.30. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PFG.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 54.14 earlier during the day, the market bounced off the key technical support level at 54.22 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Tuesday, PFG actually lost -2.57% on the following trading day. Prices broke below the key technical support level at 55.41 (now R1), which is likely to act as resistance going forward.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 58.63.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to August's low at 53.44 we could see further downside momentum if potential sell stops at the level get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Principal Financial. Out of 60 times, PFG closed higher 66.67% 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 60.00% with an average market move of 1.12%.