VSTM closes above its opening price after recovering from early selling pressure
Verastem Inc. (VSTM) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
VSTM finished the month -7.53% lower at 1.72 after gaining $0.02 (1.18%) today, slightly underperforming the S&P 500 (1.54%). Trading up to $0.07 lower after the open, Verastem managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (VSTM as at Jun 30, 2020):
Tuesday's trading range has been $0.10 (5.92%), that's slightly 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 bullish candlestick pattern matches today's price action, the Hammer. The last time a Hammer showed up on March 17th, VSTM actually lost -15.31% on the following trading day.
Prices are trading close to the key technical resistance level at 1.77 (R1).
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 four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near high of period" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Verastem. Out of 369 times, VSTM closed lower 57.45% 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 57.45% with an average market move of -0.76%.