SPCE closes below its opening price unable to hold early session gains
Virgin Galactic Holdings, Inc. (SPCE) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
SPCE finished Wednesday at 17.41 losing $0.29 (-1.64%) on low volume, strongly underperforming the S&P 500 (-0.46%). Trading $0.26 higher after the open, Virgin Galactic was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SPCE as at Sep 16, 2020):
Wednesday's trading range has been $0.51 (2.91%), that's far below the last trading month's daily average range of $1.03. 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.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 17.28 earlier during the day, the market bounced off the key technical support level at 17.34 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move lower than 17.17 in the previous session, the stock found buyers again around the same price level today at 17.28. The last time this happened on September 10th, SPCE actually lost -5.10% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 18.08 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 16.33 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Virgin Galactic. Out of 41 times, SPCE closed lower 58.54% of the time on the next trading day after the market condition occurred.