RE still stuck within tight trading range
Everest Re Group Ltd. (RE) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
RE finished Thursday at 195.33 gaining $20.50 (11.73%), notably outperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 188.49, the share confirmed its breakout through the prior session high after trading up to $7.70 above it intraday.
Daily Candlestick Chart (RE as at Mar 26, 2020):
Thursday's trading range has been $23.33 (13.04%), that's far above the last trading month's daily average range of $16.43. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for RE. Prices continued to consolidate within a tight trading range between 168.16 and 202.04 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. The last time this happened on March 13th, RE actually lost -14.30% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical resistance level at 202.04 (R1). After having been unable to move lower than 174.07 in the previous session, the stock found buyers again around the same price level today at 172.86.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 202.04 where further buy stops could get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Everest Re. Out of 776 times, RE closed higher 52.84% 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 58.25% with an average market move of 0.50%.