SPCE closes lower for the 4th day in a row
Virgin Galactic Holdings, Inc. (SPCE) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, SPCE finished the month 37.39% higher at 22.45 after losing $0.43 (-1.88%) today on low volume, significantly underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (SPCE as at Jul 31, 2020):
Friday's trading range has been $1.31 (5.65%), that's below the last trading month's daily average range of $1.97. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently just the same than usual for SPCE.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 21.91 (S1). After having been unable to move lower than 21.91 in the previous session, the stock found buyers again around the same price level today at 22.09. The last time this happened on Tuesday, SPCE actually lost -3.73% on the following trading day.
While the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 21.91 where further sell stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for Virgin Galactic. Out of 4 times, SPCE closed lower 100.00% 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 50.00% with an average market move of -2.10%.