WU closes below its opening price unable to hold early session gains
Western Union Company (WU) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, WU finished Wednesday at 22.39 losing $0.04 (-0.18%), but still slightly outperforming the S&P 500 (-0.46%). Trading $0.28 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (WU as at Sep 16, 2020):
Wednesday's trading range has been $0.42 (1.87%), that's slightly below the last trading month's daily average range of $0.48. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above 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 22.26 and 22.90 where it has been caught now for the last three trading days.
Prices are trading close to the key technical support level at 22.33 (S1). After having been unable to move lower than 22.37 in the prior session, Western Union found buyers again around the same price level today at 22.36. The last time this happened on September 2nd, WU actually lost -3.09% on the following trading day.
Although the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the close-by swing high at 22.90 where further buy stops could get activated. Selling might accelerate should prices move below the nearby swing low at 21.84 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Western Union. Out of 295 times, WU closed higher 59.66% 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 55.25% with an average market move of 0.20%.