ABC closes below its opening price unable to hold early session gains
AmerisourceBergen Corporation (ABC) Technical Analysis Report for Dec 05, 2019 | by Techniquant Editorial Team
ABC ended Thursday at 87.82 losing $0.54 (-0.61%), underperforming the S&P 500 (0.15%). Trading $0.80 higher after the open, AmerisourceBergen was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (ABC as at Dec 05, 2019):
Thursday's trading range has been $1.66 (1.88%), that's slightly below the last trading month's daily average range of $1.93. 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 ABC. Prices continued to consolidate within a tight trading range between 86.54 and 88.97 where it has been caught now for the whole last trading week.
After moving higher in the prior session, the share closed lower but above the previous day's open today, forming a bearish Harami Candle. 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. The last time a Bearish High-Wave Candle showed up on October 26, 2018, ABC actually gained 1.50% on the following trading day.
After trading as low as 87.23 during the day, the market found support at the 20-day moving average at 87.36. Unable to break through the key technical resistance level at 88.78 (R1), the stock closed below it after spiking up to 88.89 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move above 88.97 in the prior session, ABC ran into sellers again around the same price level today, missing to move higher than 88.89.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the close-by swing high at 88.97 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 86.54 where further sell stops might get triggered. Further buying could move prices higher should the market test November's close-by high at 90.81.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish High-Wave Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for AmerisourceBergen. Out of 29 times, ABC closed higher 58.62% 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 65.52% with an average market move of 1.22%.