WU breaks back below 200-day moving average
Western Union Company (WU) Technical Analysis Report for Aug 05, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, WU finished Wednesday at 22.88 tanking $1.31 (-5.42%) on high volume, significantly underperforming the S&P 500 (0.64%) following Tuesday's earnings report. This is the biggest single-day loss in over four months. The last time we've seen such an unusually strong single-day loss on March 9th, WU actually gained 8.58% on the following trading day. Closing below Tuesday's low at 23.87, the share confirmed its breakout through the prior session low after trading up to $1.40 below it intraday.
Daily Candlestick Chart (WU as at Aug 05, 2020):
WU reported earnings of $0.41 per share after Tuesday's market close. With analysts having expected an EPS of $0.36, Western Union Company topped market expectations by 13.9%. The company's last earnings report was released on May 5, 2020, when Western Union Company reported earnings of $0.44 per share topping market expectations by 7.3%.
Wednesday's trading range has been $2.66 (10.92%), that's far above the last trading month's daily average range of $0.74. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for WU.
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. Regardless of a strong opening Western Union closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 22.47 during the day, the market found support at the 20-day moving average at 22.60. The stock closed back below the 200-day moving average at 23.44 for the first time since July 28th.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 16 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Western Union. Out of 19 times, WU closed higher 57.89% 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 73.68% with an average market move of 2.80%.