TWO dominated by bulls lifting the market higher throughout the day
Two Harbors Investment Corp (TWO) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
TWO finished the week 0.2% higher at 15.29 after surging $0.14 (0.92%) today, outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 15.27, the share confirmed its breakout through the previous session high after trading up to $0.04 above it intraday.
Daily Candlestick Chart (TWO as at Feb 14, 2020):
Friday's trading range has been $0.16 (1.06%), that's slightly below the last trading month's daily average range of $0.19. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for TWO. Prices continued to consolidate within a tight trading range between 15.09 and 15.40 where it has been caught now for the whole last trading week.
In spite of a weak opening the stock managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Tweezer Bottom and the White Candle which are both known as bullish patterns.
The market managed to close back above the 20-day moving average at 15.23 for the first time since February 7th. Prices are trading close to the key technical resistance level at 15.38 (R1). Two Harbors found buyers again today around 15.15 for the third trading day in a row after having found demand at 15.15 in the previous session and at 15.16 two days ago. The last time this happened on February 4th, TWO gained 1.50% 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 15.40 where further buy stops might get triggered.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for Two Harbors. Out of 96 times, TWO closed higher 62.50% 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 10 trading days, showing a win rate of 56.25% with an average market move of 0.00%.