PHM closes above its opening price after recovering from early selling pressure
PulteGroup Inc. (PHM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 7th day in a row, PHM ended the week 20.17% higher at 33.31 after gaining $0.62 (1.9%) today on low volume, strongly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 33.31 marks the highest recorded closing price since March 11th. Trading up to $0.62 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 11th, PHM actually lost -4.52% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (PHM as at May 22, 2020):
Friday's trading range has been $1.17 (3.54%), that's below the last trading month's daily average range of $1.42. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for PHM.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day while might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 29.14.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Its common bullish interpretation has been confirmed for PulteGroup. Out of 417 times, PHM closed higher 51.80% 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 53.72% with an average market move of 0.56%.