UFS breaks below Tuesday's low
Domtar Corporation (UFS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UFS finished Wednesday at 26.17 losing $0.57 (-2.13%), significantly underperforming the S&P 500 (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 26.70, the share confirmed its breakout through the previous session low after trading up to $0.56 below it intraday.
Daily Candlestick Chart (UFS as at Sep 16, 2020):
Wednesday's trading range has been $1.15 (4.25%), that's above the last trading month's daily average range of $1.00. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for UFS.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 25.89 (S1).
Though the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the close-by swing low at 25.89 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Domtar. Out of 427 times, UFS closed higher 54.57% 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 three trading days, showing a win rate of 51.52% with an average market move of 0.06%.