VSTM finds buyers again around 1.62
Verastem Inc. (VSTM) Technical Analysis Report for Jul 01, 2020 | by Techniquant Editorial Team
VSTM ended Wednesday at 1.68 losing $0.04 (-2.33%), strongly underperforming the S&P 500 (0.5%). Today's close at 1.68 marks the lowest recorded closing price since March 18th. 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 Jul 01, 2020):
Wednesday's trading range has been $0.08 (4.71%), that's far 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.
Two candlestick patterns are matching today's price action, the Hammer and the Tweezer Bottom which are both known as bullish patterns. The last time a Tweezer Bottom showed up on March 13th, VSTM actually lost -15.54% on the following trading day.
After having been unable to move lower than 1.62 in the previous session, the share found buyers again around the same price level today at 1.62.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Trading close to May's low at 1.61 we might see further downside momentum if potential sell stops at the level get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hammer" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Verastem. Out of 13 times, VSTM closed lower 53.85% 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 53.85% with an average market move of -1.06%.