WEX closes within previous day's range after lackluster session
WEX Inc. (WEX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, WEX ended the week 15.13% higher at 138.73 after edging higher $0.22 (0.16%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 138.73 marks the highest recorded closing price since March 10th. Trading up to $2.50 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. 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 (WEX as at May 22, 2020):
Friday's trading range has been $3.33 (2.4%), that's far below the last trading month's daily average range of $7.38. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for WEX. Prices continued to consolidate within a tight trading range between 134.23 and 140.90 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man. The last time a Hanging Man showed up on May 1st, WEX lost -1.08% on the following trading day.
After having been unable to move lower than 135.04 in the previous session, the market found buyers again around the same price level today at 136.01.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 140.90 where further buy stops could get triggered. As prices are trading close to May's high at 143.64, upside momentum might speed up should the stock mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for WEX. Out of 182 times, WEX closed higher 54.40% 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 62.64% with an average market move of 1.16%.