PHM dominated by bears dragging the market lower throughout the day
PulteGroup Inc. (PHM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
PHM finished the week 1.28% higher at 46.69 after flat today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (PHM as at Feb 14, 2020):
Friday's trading range has been $0.27 (0.57%), that's far below the last trading month's daily average range of $1.04. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for PHM. Prices continued to consolidate within a tight trading range between 46.25 and 47.17 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on February 4th, PHM actually gained 2.70% on the following trading day.
Prices are trading close to the key technical resistance level at 47.17 (R1). After having been unable to move above 47.01 in the prior session, PulteGroup ran into sellers again around the same price level today, missing to move higher than 46.96.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 47.17 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 46.36 where further sell stops could get triggered. With prices trading close to this year's high at 47.30, upside momentum might speed up should the market be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for PulteGroup. Out of 283 times, PHM closed higher 50.53% 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 59.72% with an average market move of 1.58%.