BAX snaps to lowest close since April 1st
Baxter International Inc. (BAX) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BAX ended Tuesday at 81.08 losing $2.08 (-2.5%) on high volume, strongly underperforming the S&P 500 (0.36%). Today's close at 81.08 marks the lowest recorded closing price since April 1st. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (BAX as at Aug 04, 2020):
Tuesday's trading range has been $2.31 (2.79%), that's above the last trading month's daily average range of $1.87. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for BAX.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 81.35 (now R1), which is likely to act as resistance going forward.
Crossing below the lower Bollinger Band for the first time since June 11th, 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 86.70 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 June 11th, BAX actually gained 0.48% on the following trading day.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Baxter International. Out of 73 times, BAX closed higher 67.12% 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 75.34% with an average market move of 1.81%.