PNW closes above its opening price after recovering from early selling pressure
Pinnacle West Capital Corporation (PNW) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
PNW ended the week 1.74% higher at 72.66 after gaining $0.38 (0.53%) today, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.70 lower after the open, Pinnacle West managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 15th, PNW gained 4.82% on the following trading day. 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 (PNW as at May 22, 2020):
Friday's trading range has been $1.24 (1.72%), that's far below the last trading month's daily average range of $2.10. 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 PNW. Prices continued to consolidate within a tight trading range between 71.50 and 73.32 where it has been caught now for the last three trading days.
Notwithstanding a weak opening the stock managed to close above the prior day's open and close, forming a bullish Engulfing Candle.
After trading down to 71.50 earlier during the day, the market bounced off the key technical support level at 72.17 (S1). The failure to close below the support might increase that levels importance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 73.32 where further buy stops might get activated. As prices are trading close to May's high at 75.74, upside momentum could speed up should the share mark new highs for the month. Further selling might move prices lower should the market test April's nearby low at 67.29.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for Pinnacle West. Out of 69 times, PNW closed higher 56.52% 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 60.87% with an average market move of 0.81%.