VZ breaks below key technical support level
Verizon Communications Inc. (VZ) Technical Analysis Report for Feb 18, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, VZ finished Tuesday at 57.91 losing $0.60 (-1.03%), slightly underperforming the Dow Indu. (-0.56%). Today's close at 57.91 marks the lowest recorded closing price since August 27, 2019. The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 58.28, the share confirmed its breakout through the prior session low after trading up to $0.47 below it intraday.
Daily Candlestick Chart (VZ as at Feb 18, 2020):
Tuesday's trading range has been $0.98 (1.67%), that's slightly above the last trading month's daily average range of $0.88. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for VZ.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Last Engulfing Bottom Pattern which are both known as bullish patterns and one bearish pattern, the Black Candle. The last time a Black Candle showed up on February 11th, VZ lost -0.78% on the following trading day.
Prices are trading close to the key technical support level at 57.65 (S1). Prices broke below the key technical support level at 58.34 (now R1), which is likely to act as resistance going forward. Verizon Communications was sold again around 58.79 after having seen highs at 58.81, 58.83 and 58.86 in the last three trading sessions. Obviously there is something going on at that level.
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 57.65, downside momentum might accelerate should the market break out to new lows for the year.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. Its common bearish interpretation has been confirmed for Verizon Communications. Out of 18 times, VZ closed lower 61.11% 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 72.22% with an average market move of -1.12%.