UAL dominated by bears dragging the market lower throughout the day
United Continental Holdings Inc. (UAL) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UAL ended the week 0.09% higher at 79.55 after losing $1.44 (-1.78%) today on low volume, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 80.37, the share confirmed its breakout through the prior session low after trading up to $0.97 below it intraday.
Daily Candlestick Chart (UAL as at Feb 14, 2020):
Friday's trading range has been $2.04 (2.52%), that's slightly below the last trading month's daily average range of $2.51. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for UAL.
Even with a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 77.98 (S1). The stock closed back below the 20-day moving average at 80.32. When this moving average was crossed below the last time on January 21st, UAL lost -2.86% on the following trading day. After having been unable to move above 81.74 in the prior session, United Continental ran into sellers again around the same price level today, missing to move higher than 81.44.
Although UAL 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 77.78 where further sell stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for United Continental. Out of 579 times, UAL closed higher 54.75% 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 60.28% with an average market move of 1.76%.