TRV finds buyers at key support level
The Travelers Companies Inc. (TRV) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, TRV ended the month 0.32% higher at 114.42 after losing $1.51 (-1.3%) today, notably underperforming the Dow Indu. (0.44%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (TRV as at Jul 31, 2020):
Friday's trading range has been $3.20 (2.78%), that's slightly below the last trading month's daily average range of $3.21. 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 TRV.
One bullish candlestick pattern matches today's price action, the Hammer. The last time a Hammer showed up on June 29th, TRV gained 1.02% on the following trading day.
After trading down to 112.58 earlier during the day, The Travelers bounced off the key technical support level at 114.28 (S1). The failure to close below the support could increase that levels significance as support going forward. The market closed below the 50-day moving average at 114.67 for the first time since May 20th.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the close-by swing high at 117.25 where further buy stops could get activated. As prices are trading close to July's low at 109.09, downside momentum might speed up should the stock mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hammer" stand out. Its common bullish interpretation has been confirmed for The Travelers. Out of 30 times, TRV closed higher 56.67% 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 73.33% with an average market move of 1.54%.