RDN breaks below 100-day moving average for the first time since July 29th
Radian Group Inc. (RDN) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
RDN ended the week -1.87% lower at 15.18 after tanking $0.47 (-3.0%) today on high volume, notably underperforming the S&P 500 (-1.12%). Today's close at 15.18 marks the lowest recorded closing price since August 26th. Closing below Thursday's low at 15.32, the share confirmed its breakout through the previous session low after trading up to $0.39 below it intraday.
Daily Candlestick Chart (RDN as at Sep 18, 2020):
Friday's trading range has been $0.86 (5.46%), that's far above the last trading month's daily average range of $0.49. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RDN.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Despite a strong opening Radian Group closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 14.93 during the day, the stock found support at the 50-day moving average at 15.03. The market closed below the 100-day moving average at 15.24 for the first time since July 29th. When this moving average was crossed below the last time on June 9th, RDN lost -6.06% on the following trading day.
Though RDN is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Further selling might move prices lower should the market test August's close-by low at 14.48.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. Its common bullish interpretation has been confirmed for Radian Group. Out of 42 times, RDN closed higher 52.38% 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 57.14% with an average market move of 1.16%.