VSTM closes within prior day's range after lackluster session
Verastem Inc. (VSTM) Technical Analysis Report for Jun 29, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, VSTM finished Monday at 1.70 losing $0.04 (-2.3%), notably underperforming the S&P 500 (1.47%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (VSTM as at Jun 29, 2020):
Monday's trading range has been $0.09 (5.08%), that's below the last trading month's daily average range of $0.11. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for VSTM.
One bearish candlestick pattern matches today's price action, the Black Candle.
Unable to break through the key technical resistance level at 1.77 (R1), the stock closed below it after spiking up to 1.77 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 1.69 in the previous session, the share found buyers again around the same price level today at 1.68. The last time this happened on June 22nd, VSTM gained 3.24% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Further selling might move prices lower should the market test May's nearby low at 1.61.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for Verastem. Out of 387 times, VSTM closed lower 53.49% 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 57.11% with an average market move of 0.05%.