RRC finds support at 50-day moving average
Range Resources Corporation (RRC) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, RRC finished the month 14.74% higher at 6.46 after edging lower $0.06 (-0.92%) today, notably underperforming the S&P 500 (0.77%). 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 (RRC as at Jul 31, 2020):
Friday's trading range has been $0.29 (4.46%), that's below the last trading month's daily average range of $0.41. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for RRC.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on April 28th, RRC actually gained 9.43% on the following trading day.
After trading as low as 6.22 during the day, the market found support at the 50-day moving average at 6.36. The share closed back below the 20-day moving average at 6.50.
While Range Resources is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the close-by swing high at 6.63 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 6.02 where further sell stops could get activated. As prices are trading close to July's high at 7.02, upside momentum might accelerate should the stock mark new highs for the month.
Among the seven 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. Although it is usually interpreted as bullish, it has actually shown to be bearish for Range Resources. Out of 43 times, RRC closed lower 55.81% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 55.81% with an average market move of -2.18%.