ABBV loses $1.10 (-1.15%) after posting strong earnings
AbbVie Inc. (ABBV) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ABBV finished the month -3.3% lower at 94.94 after losing $1.10 (-1.15%) today on high volume, significantly underperforming the S&P 500 (0.77%) following today's earnings report. Today's close at 94.94 marks the lowest recorded closing price since June 15th. Trading $1.71 higher after the open, AbbVie was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 95.41, the stock confirmed its breakout through the prior session low after trading up to $1.83 below it intraday.
Daily Candlestick Chart (ABBV as at Jul 31, 2020):
ABBV reported earnings of $2.34 per share before today's market open. With analysts having expected an EPS of $2.23, AbbVie Inc. surpassed market expectations by 4.9%. The company's last earnings report was released on May 1, 2020, when AbbVie Inc. reported earnings of $2.42 per share topping market expectations by 7.1%.
Friday's trading range has been $3.67 (3.84%), that's far above the last trading month's daily average range of $1.95. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ABBV.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 93.57 (S1). The market closed below the 50-day moving average at 95.91 for the first time since April 22nd.
Crossing below the lower Bollinger Band for the first time since March 23rd, 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 98.10 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 23rd, ABBV actually gained 4.64% on the following trading day.
While the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for AbbVie. Out of 99 times, ABBV closed higher 57.58% 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 66.67% with an average market move of 2.97%.