PRU breaks back below 20-day moving average
Prudential Financial Inc. (PRU) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
PRU ended the week 6.33% higher at 56.28 after losing $1.39 (-2.41%) today, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (PRU as at May 22, 2020):
Friday's trading range has been $2.06 (3.64%), that's below the last trading month's daily average range of $2.61. 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 PRU. Prices continued to consolidate within a tight trading range between 54.87 and 57.97 where it has been caught now for the whole last trading week.
After moving higher in the prior session, the stock closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Hanging Man which are both known as bearish patterns. The last time a Bearish Spinning Top showed up on April 21st, PRU actually gained 3.51% on the following trading day.
The market closed back below the 20-day moving average at 57.27.
Prudential Financial shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 57.97 where further buy stops might get triggered. As prices are trading close to May's high at 60.66, upside momentum could speed up should the share mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Prudential Financial. Out of 172 times, PRU closed higher 57.56% 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 three trading days, showing a win rate of 56.40% with an average market move of 0.12%.