TRP breaks back below 20-day moving average
TransCanada Corporation (TRP) Technical Analysis Report for Oct 16, 2020 | by Techniquant Editorial Team
TRP finished the week -1.71% lower at 43.03 after losing $0.75 (-1.71%) today on low volume, significantly underperforming the S&P 500 (0.01%). The bears were in full control today, moving the market lower throughout the whole session. 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 (TRP as at Oct 16, 2020):
Friday's trading range has been $0.66 (1.51%), that's far below the last trading month's daily average range of $1.15. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for TRP.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, TransCanada closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on October 6th, TRP actually gained 1.43% on the following trading day.
Prices are trading close to the key technical support level at 42.48 (S1). The market closed back below the 20-day moving average at 43.34.
While the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the close-by swing low at 42.71 where further sell stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for TransCanada. Out of 33 times, TRP closed higher 51.52% 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 63.64% with an average market move of 0.86%.