VSTM declines to lowest close since January 7th
Verastem Inc. (VSTM) Technical Analysis Report for Jul 07, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, VSTM ended Tuesday at 1.50 tanking $0.11 (-6.83%), significantly underperforming the S&P 500 (-1.08%). Today's close at 1.50 marks the lowest recorded closing price since January 7th.
Daily Candlestick Chart (VSTM as at Jul 07, 2020):
Tuesday's trading range has been $0.11 (7.01%), 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 higher than usual for VSTM.
One bearish candlestick pattern matches today's price action, the Black Candle.
Crossing below the lower Bollinger Band for the first time since June 11th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 1.76 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on June 11th, VSTM actually gained 4.14% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 1.23, downside momentum might speed up should Verastem break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. Its common bearish interpretation has been confirmed for Verastem. Out of 92 times, VSTM closed lower 50.00% 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 four trading days, showing a win rate of 56.52% with an average market move of -0.13%.