WU still stuck within tight trading range
Western Union Company (WU) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
WU finished the week 2.37% higher at 19.01 after edging higher $0.12 (0.64%) today on low volume, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.19 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. 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 (WU as at May 22, 2020):
Friday's trading range has been $0.38 (2.0%), that's far below the last trading month's daily average range of $0.73. 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 WU. Prices continued to consolidate within a tight trading range between 18.70 and 19.52 where it has been caught now for the whole last trading week.
After moving lower in the previous session, the stock managed to close higher but below the prior day's open, forming a bullish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Bullish Spinning Top which are both known as bullish patterns.
After trading down to 18.78 earlier during the day, Western Union bounced off the key technical support level at 18.91 (S1). The failure to close below the support could increase that levels importance as support going forward. The share found buyers again today around 18.78 for the third trading day in a row after having found demand at 18.84 in the previous session and at 18.83 two days ago. The last time this happened on April 3rd, WU gained 8.47% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 19.52 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 18.70 where further sell stops could get triggered. With prices trading close to this year's low at 17.39, downside momentum might accelerate should WU break out to new lows for the year. As prices are trading close to May's high at 20.11, upside momentum could speed up should the market mark new highs for the month.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Western Union. Out of 420 times, WU closed higher 55.00% 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 59.05% with an average market move of 0.34%.