RE unable to break through key resistance level
Everest Re Group Ltd. (RE) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
RE finished Wednesday at 206.28 edging higher $0.16 (0.08%), outperforming the S&P 500 (-0.46%). Trading $3.49 higher after the open, the share 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 failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (RE as at Sep 16, 2020):
Wednesday's trading range has been $4.97 (2.4%), that's slightly below the last trading month's daily average range of $5.06. 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 RE.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Homing Pigeon which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Homing Pigeon showed up on August 5th, RE gained 2.07% on the following trading day.
Unable to break through the key technical resistance level at 209.26 (R1), the stock closed below it after spiking up to 210.38 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. After having been unable to move lower than 205.39 in the prior session, the market found buyers again around the same price level today at 205.41.
Although Everest Re is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 211.92 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 205.39 where further sell stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Homing Pigeon" stand out. Its common bullish interpretation has been confirmed for Everest Re. Out of 17 times, RE closed higher 52.94% 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 70.59% with an average market move of 2.05%.