VSTM rallies, gaining $0.09 (6.21%) within a single day
Verastem Inc. (VSTM) Technical Analysis Report for Aug 12, 2020 | by Techniquant Editorial Team
VSTM finished Wednesday at 1.54 surging $0.09 (6.21%), significantly outperforming the S&P 500 (1.4%). This is the biggest single-day gain in over three weeks. The last time we've seen such an unusually strong single-day gain on April 22nd, VSTM actually lost -5.00% on the following trading day. Today's close at 1.54 marks the highest recorded closing price since July 6th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (VSTM as at Aug 12, 2020):
Wednesday's trading range has been $0.12 (8.22%), that's slightly above 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 below 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 White Candle.
Verastem was bought again around 1.46 after having seen lows at 1.44, 1.44 and 1.46 in the last three trading sessions. Obviously there is something going on at that level.
While the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the close-by swing high at 1.65 where further buy stops might get triggered. Further buying could move prices higher should the market test July's nearby high at 1.70.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous three Lows" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Verastem. Out of 61 times, VSTM closed lower 54.10% 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 65.57% with an average market move of -3.01%.