RE closes below its opening price unable to hold early session gains
Everest Re Group Ltd. (RE) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
RE ended the week 3.11% higher at 291.37 after edging lower $0.41 (-0.14%) today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $1.84 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (RE as at Feb 14, 2020):
Friday's trading range has been $4.24 (1.45%), that's slightly below the last trading month's daily average range of $4.50. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for RE.
Two candlestick patterns are matching today's price action, the Bearish Hikkake Pattern and the Bearish Spinning Top which are both known as bearish patterns.
Prices are trading close to the key technical resistance level at 294.31 (R1).
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 281.35. The last time this happened on Wednesday, RE actually gained 1.43% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 294.31 where further buy stops could get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Everest Re. Out of 210 times, RE closed higher 53.33% 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 58.10% with an average market move of 0.74%.