UAL dominated by bears dragging the market lower throughout the day
United Continental Holdings Inc. (UAL) Technical Analysis Report for Sep 21, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UAL ended Monday at 33.79 tanking $3.18 (-8.6%), notably underperforming the S&P 500 (-1.16%). This is the biggest single-day loss in over three months. The last time we've seen such an unusually strong single-day loss on June 11th, UAL actually gained 19.03% on the following trading day. Today's close at 33.79 marks the lowest recorded closing price since August 21st. The bears were in full control today, moving the market lower throughout the whole session.
Daily Candlestick Chart (UAL as at Sep 21, 2020):
Monday's trading range has been $2.28 (6.44%), that's slightly above the last trading month's daily average range of $2.02. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for UAL.
One bearish candlestick pattern matches today's price action, the Black Candle.
The stock closed below the 50-day moving average at 34.86 for the first time since August 21st.
Crossing below the lower Bollinger Band for the first time since May 13th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 36.53 or signal the beginning of a strong momentum breakout leading to even lower prices.
Though the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Further selling could move prices lower should the market test August's close-by low at 30.32.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the lower Bollinger Band" stand out. Its common bearish interpretation has been confirmed for United Continental. Out of 55 times, UAL closed lower 69.09% 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 60.00% with an average market move of -1.83%.