TWO closes within prior day's range after lackluster session
Two Harbors Investment Corp (TWO) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
TWO ended the month 11.5% higher at 5.04 after losing $0.14 (-2.7%) today, notably underperforming the S&P 500 (1.54%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (TWO as at Jun 30, 2020):
Tuesday's trading range has been $0.20 (3.9%), that's far below the last trading month's daily average range of $0.44. 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 TWO. Prices continued to consolidate within a tight trading range between 4.79 and 5.31 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Tweezer Top.
Two Harbors ran into sellers again today around 5.18 for the third trading day in a row after having found sellers at 5.18 in the prior session and at 5.21 two days ago. The last time this happened on June 25th, TWO lost -3.61% on the following trading day.
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 accelerate should prices move above the close-by swing high at 5.37 where further buy stops could get activated. Selling might speed up should prices move below the nearby swing low at 4.79 where further sell stops could get triggered. As prices are trading close to June's low at 4.52, downside momentum might accelerate should the share mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous two Highs" stand out. Its common bearish interpretation has been confirmed for Two Harbors. Out of 189 times, TWO closed lower 51.85% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 56.08% with an average market move of -0.33%.