SRE still stuck within tight trading range
Sempra Energy (SRE) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
SRE finished the week 3.87% higher at 123.81 after gaining $2.73 (2.25%) today on low volume, strongly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 123.79, the market confirmed its breakout through the prior session high after trading up to $0.18 above it intraday.
Daily Candlestick Chart (SRE as at May 22, 2020):
Friday's trading range has been $3.40 (2.81%), that's below the last trading month's daily average range of $4.16. 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 SRE. Prices continued to consolidate within a tight trading range between 120.57 and 127.43 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. The last time this happened on Tuesday, SRE actually lost -2.74% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
The share managed to close back above the 20-day moving average at 123.45. Prices are trading close to the key technical resistance level at 125.59 (R1). After having been unable to move lower than 120.96 in the previous session, Sempra Energy found buyers again around the same price level today at 120.57.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the nearby swing high at 127.43 where further buy stops could get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for Sempra Energy. Out of 166 times, SRE closed higher 57.23% 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 60.84% with an average market move of 0.75%.