RF still stuck within tight trading range
Regions Financial Corporation (RF) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
RF finished the week 8.27% higher at 9.95 after edging higher $0.01 (0.1%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading $0.16 higher after the open, Regions Financial 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 in a lackluster session.
Daily Candlestick Chart (RF as at May 22, 2020):
Friday's trading range has been $0.38 (3.81%), that's below the last trading month's daily average range of $0.52. 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 RF. Prices continued to consolidate within a tight trading range between 9.59 and 10.28 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on April 30th, RF lost -5.40% on the following trading day.
Prices are trading close to the key technical support level at 9.75 (S1).
The market 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 10.28 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 9.59 where further sell stops might get triggered. As prices are trading close to May's high at 10.58, upside momentum could accelerate should the stock mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Regions Financial. Out of 402 times, RF closed higher 52.49% 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 58.21% with an average market move of 0.49%.