NSC tanks, losing $7.02 (-3.33%) within a single day

Norfolk Southern Corporation (NSC) Technical Analysis Report for Oct 27, 2020 | by Techniquant Editorial Team


NSC crashes, losing $7.02 (-3.33%) within a single day
NSC breaks below key technical support level
NSC falls to lowest close since August 7th
NSC dominated by bears dragging the market lower throughout the day
NSC closes lower for the 2nd day in a row


Moving lower for the 2nd day in a row, NSC ended Tuesday at 203.64 tanking $7.02 (-3.33%), notably underperforming the S&P 500 (-0.3%) ahead of Wednesday's earnings report. This is the biggest single-day loss in over four months. Today's close at 203.64 marks the lowest recorded closing price since August 7th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 208.92, the share confirmed its breakout through the prior session low after trading up to $5.57 below it intraday.

Daily Candlestick Chart (NSC as at Oct 27, 2020):

Daily technical analysis candlestick chart for Norfolk Southern Corporation (NSC) as at Oct 27, 2020

NSC is set to report earnings before tomorrow's market open. For the upcoming report, analysts expect the company to have earned $2.36 per share. The company's last earnings report was released on July 29, 2020, when Norfolk Southern Corporation reported earnings of $1.53 per share topping market expectations by 10.1%.

Tuesday's trading range has been $7.49 (3.55%), that's far above the last trading month's daily average range of $4.87. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NSC.

One bearish candlestick pattern matches today's price action, the Black Candle.

Prices broke below the key technical support level at 208.17 (now R1), which is likely to act as resistance going forward.

Crossing below the lower Bollinger Band for the first time since March 16th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 214.57 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on March 16th, NSC actually gained 10.40% on the following trading day.

Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.

Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Norfolk Southern. Out of 59 times, NSC closed higher 59.32% 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 59.32% with an average market move of 0.68%.

Market Conditions for NSC as at Oct 27, 2020

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