TRV closes lower for the 6th day in a row
The Travelers Companies Inc. (TRV) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
Moving lower for the 6th day in a row, TRV ended the week -5.22% lower at 123.56 after losing $1.85 (-1.48%) today, but still outperforming the Dow Indu. (-2.24%) following today's NFP report. Today's close at 123.56 marks the lowest recorded closing price since November 14th. Trading $1.55 higher after the open, the market 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 failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (TRV as at Dec 07, 2018):
Friday's trading range has been $3.32 (2.66%), that's slightly above the last trading month's daily average range of $2.92. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for TRV.
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.
Prices are trading close to the key technical support level at 121.75 (S1). Prices broke below the key technical support level at 123.96 (now R1), which is likely to act as resistance going forward. After having been unable to move above 126.43 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 126.19. The last time this happened on Tuesday, TRV lost -1.01% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 121.75 where further sell stops could get activated. With prices trading close to this year's low at 119.67, downside momentum might accelerate should The Travelers break out to new lows for the year. Further selling could move prices lower should the market test November's nearby low at 121.40.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "6 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for The Travelers. Out of 8 times, TRV closed higher 87.50% 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 nine trading days, showing a win rate of 37.50% with an average market move of -0.79%.