ABBV finds buyers at key support level
AbbVie Inc. (ABBV) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
ABBV ended the week 1.53% higher at 92.10 after losing $0.92 (-0.99%) today on low volume, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (ABBV as at May 22, 2020):
Friday's trading range has been $1.28 (1.38%), that's far below the last trading month's daily average range of $2.79. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ABBV. Prices continued to consolidate within a tight trading range between 89.56 and 93.66 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, the stock closed lower but above the prior day's open today, forming a bearish Harami Candle. 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 April 7th, ABBV actually gained 4.20% on the following trading day.
After trading down to 91.73 earlier during the day, the share bounced off the key technical support level at 91.86 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move above 93.13 in the previous session, AbbVie ran into sellers again around the same price level today, missing to move higher than 93.01.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 93.13 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 89.56 where further sell stops could get activated. With prices trading close to this year's high at 97.86, upside momentum might accelerate should the market be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for AbbVie. Out of 317 times, ABBV closed higher 58.68% 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 56.47% with an average market move of 0.39%.