PFG pushes through key technical resistance level
Principal Financial Group Inc (PFG) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
PFG ended the week 1.39% higher at 56.36 after gaining $0.37 (0.66%) today, slightly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (PFG as at Feb 14, 2020):
Friday's trading range has been $0.49 (0.88%), that's far below the last trading month's daily average range of $0.94. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PFG.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a White Candle showed up on Monday, PFG gained 0.97% on the following trading day.
Buyers managed to take out the key technical resistance level at 56.09 (now S1), which is likely to act as support going forward. After having been unable to move above 56.51 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 56.39.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the close-by swing high at 57.00 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 55.64 where further sell stops might get triggered. With prices trading close to this year's high at 57.16, upside momentum could accelerate should Principal Financial be able to break out to new highs for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Principal Financial. Out of 527 times, PFG closed higher 54.65% 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 59.20% with an average market move of 0.61%.