BDX unable to break through key resistance level
Becton Dickinson and Company (BDX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
BDX finished the week -7.36% lower at 239.25 after gaining $0.31 (0.13%) today on high volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading $3.14 higher after the open, the share 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 (BDX as at May 22, 2020):
Friday's trading range has been $6.10 (2.53%), that's slightly below the last trading month's daily average range of $7.35. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BDX.
Unable to break through the key technical resistance level at 241.75 (R1), the stock closed below it after spiking up to 244.66 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on May 6th, BDX lost -1.11% on the following trading day. After having been unable to move above 243.60 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 244.66.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day while could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 256.66.
Becton Dickinson shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could speed up should prices move below the close-by swing low at 234.51 where further sell stops might get activated.
Among the six 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 Becton Dickinson. Out of 115 times, BDX closed higher 61.74% 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 62.61% with an average market move of 1.32%.