WY loses $0.59 (-2.08%) after posting strong earnings
Weyerhaeuser Company (WY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
WY finished the month 23.82% higher at 27.81 after losing $0.59 (-2.08%) today on high volume, significantly underperforming the S&P 500 (0.77%) following today's earnings report. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (WY as at Jul 31, 2020):
WY reported earnings of $0.11 per share before today's market open. With analysts having expected an EPS of $0.01, Weyerhaeuser Company beat market expectations by 1,000.0%. The company's last earnings report was released on May 1, 2020, when Weyerhaeuser Company reported earnings of $0.18 per share surpassing market expectations by 28.6%.
Friday's trading range has been $1.62 (5.63%), that's far above the last trading month's daily average range of $0.79. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for WY.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Regardless of a strong opening the market closed below the prior 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 down to 27.41 earlier during the day, the share bounced off the key technical support level at 27.64 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 27.47 in the previous session, Weyerhaeuser found buyers again around the same price level today at 27.41. The last time this happened on July 24th, WY gained 5.25% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bearish for Weyerhaeuser. Out of 33 times, WY closed lower 69.70% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 60.61% with an average market move of -0.99%.