UNP finds support at 20-day moving average
Union Pacific Corporation (UNP) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, UNP finished the week 0.09% higher at 184.00 after losing $0.64 (-0.35%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $0.97 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (UNP as at Feb 14, 2020):
Friday's trading range has been $2.88 (1.56%), that's slightly below the last trading month's daily average range of $3.27. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for UNP. Prices continued to consolidate within a tight trading range between 181.58 and 185.96 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading as low as 182.65 during the day, the stock found support at the 20-day moving average at 183.20. Prices broke below the key technical support level at 184.27 (now R1), which is likely to act as resistance going forward. Union Pacific was sold again around 185.53 after having seen highs at 185.55, 185.96 and 185.68 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on October 9, 2018, UNP lost -4.88% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 185.96 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 181.58 where further sell stops could get activated. With prices trading close to this year's high at 188.96, upside momentum might accelerate should the market be able to break out to new highs for the year. As prices are trading close to February's low at 179.40, downside momentum could speed up should UNP mark new lows for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Union Pacific. Out of 246 times, UNP closed higher 54.07% 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 63.01% with an average market move of 1.35%.