WBS still stuck within tight trading range
Webster Financial Corporation (WBS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
WBS ended the week 12.53% higher at 24.79 after edging lower $0.33 (-1.31%) today, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading $0.40 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on May 15th, WBS actually gained 14.07% on the following trading day. 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 (WBS as at May 22, 2020):
Friday's trading range has been $1.07 (4.26%), that's below the last trading month's daily average range of $1.49. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for WBS. Prices continued to consolidate within a tight trading range between 23.46 and 25.52 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 24.44 (S1). Webster Financial closed back below the 20-day moving average at 25.00. The market found buyers again today around 24.45 for the third trading day in a row after having found demand at 24.46 in the previous session and at 24.27 two days ago.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Webster Financial. Out of 167 times, WBS closed higher 58.08% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 53.89% with an average market move of 0.80%.