Coming off of six straight days of positive trading, Waste Connections Inc. (WCN) was down a 'very big*' $1.89 Thursday, losing 5.2% of its value to close at $34.62.
This drop was in the context of a 'trend day down' pattern, opening in the highest 20% of the day's range and closing in the lowest 20%, and WCN crossed below the lower Bollinger band. What can EventEdge® tell us about what happens historically when these events occur together?
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Q: What has happened in the past when WCN is down very big in a trend day down pattern to cross below the lower Bollinger band, omitting any repeat occurrences within 10 trading days?
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A: According to the 11 previous occurrences of this event, EventEdge indicates that WCN has shown a strong bullish edge that peaks 12 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, 4 September 2008) is Monday, 22 September 2008.
WCN rallies in 82% of the cases (9 of 11) by an average of 7.3% relative to the close on the event date. The average of the 2 declines is -1.6%. The overall return of the 11 cases is 5.7%, which, based on the close of WCN on the event date ($34.62), provides a target price of $36.59.