XOG finds buyers around 0.57 for the forth day in a row
Extraction Oil & Gas Inc. (XOG) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
XOG ended Thursday at 0.58 flat, strongly underperforming the S&P 500 (6.24%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (XOG as at Mar 26, 2020):
Thursday's trading range has been $0.05 (8.2%), that's below the last trading month's daily average range of $0.13. 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 XOG. Prices continued to consolidate within a tight trading range between 0.55 and 0.66 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on March 3rd, XOG actually gained 1.72% on the following trading day.
Prices are trading close to the key technical support level at 0.55 (S1). Extraction Oil was bought again around 0.57 after having seen lows at 0.55, 0.57 and 0.56 in the last three trading sessions. Obviously there is something going on at that level.
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could speed up should prices move below the close-by swing low at 0.55 where further sell stops might get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Extraction Oil. Out of 49 times, XOG closed lower 63.27% 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 61.22% with an average market move of -5.02%.