VSTM finds buyers again around 1.32
Verastem Inc. (VSTM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, VSTM finished the month -22.09% lower at 1.34 after edging lower $0.01 (-0.74%) today, notably underperforming the S&P 500 (0.77%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (VSTM as at Jul 31, 2020):
Friday's trading range has been $0.04 (2.99%), that's far below the last trading month's daily average range of $0.10. 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.
Three candlestick patterns are matching today's price action, the Southern Doji and the Tweezer Bottom which are both known as bullish patterns and one neutral pattern, the Doji.
Unable to break through the key technical resistance level at 1.36 (R1), the market closed below it after spiking up to 1.36 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 1.32 in the prior session, Verastem found buyers again around the same price level today at 1.32. The last time this happened on Tuesday, VSTM actually lost -2.84% 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 accelerate should the stock break out to new lows for the year. As prices are trading close to July's low at 1.30, downside momentum could speed up should the share mark new lows for the month.
Among the six 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 390 times, VSTM closed lower 53.59% 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 57.18% with an average market move of -0.05%.