VSTM runs into sellers again around 2.06
Verastem Inc. (VSTM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, VSTM ended the week 1.01% higher at 2.00 after edging lower $0.01 (-0.5%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (VSTM as at Feb 14, 2020):
Friday's trading range has been $0.12 (6.06%), that's below the last trading month's daily average range of $0.15. 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 VSTM.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading as low as 1.94 during the day, the share found support at the 20-day moving average at 1.95. The last time this happened on June 28, 2019, VSTM actually lost -6.62% on the following trading day. After having been unable to move above 2.06 in the previous session, Verastem ran into sellers again around the same price level today, failing to move higher than 2.06.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 2.12 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 1.94 where further sell stops might get activated. As prices are trading close to February's low at 1.82, downside momentum could accelerate should the stock mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Its common bearish interpretation has been confirmed for Verastem. Out of 248 times, VSTM closed lower 54.03% 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 five trading days, showing a win rate of 56.05% with an average market move of -0.10%.