ACHC finds buyers around 29.30 for the third day in a row
Acadia Healthcare Company Inc. (ACHC) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
ACHC finished the month 18.67% higher at 29.81 after losing $0.60 (-1.97%) today, significantly underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ACHC as at Jul 31, 2020):
Friday's trading range has been $1.21 (4.0%), that's slightly above the last trading month's daily average range of $1.17. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ACHC. Prices continued to consolidate within a tight trading range between 29.18 and 30.64 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Prices broke below the key technical support level at 29.90 (now R1), which is likely to act as resistance going forward. The last time this happened on July 13th, ACHC actually gained 1.31% on the following trading day. The stock found buyers again today around 29.30 for the third trading day in a row after having found demand at 29.29 in the prior session and at 29.18 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 30.64 where further buy stops might get activated. Further buying could move prices higher should the market test June's close-by high at 31.50.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Acadia Healthcare. Out of 222 times, ACHC closed higher 50.90% 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 59.01% with an average market move of 1.09%.