BIIB finds buyers again around 275.90
Biogen Inc. (BIIB) Technical Analysis Report for Jul 13, 2020 | by Techniquant Editorial Team
BIIB finished Monday at 276.52 losing $2.36 (-0.85%), but still strongly outperforming the Nasdaq 100 (-2.16%). Trading $3.58 higher after the open, Biogen was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (BIIB as at Jul 13, 2020):
Monday's trading range has been $6.96 (2.49%), that's slightly below the last trading month's daily average range of $7.22. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BIIB. Prices continued to consolidate within a tight trading range between 274.28 and 282.99 where it has been caught now for the last three trading days.
Even with a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on April 7th, BIIB actually gained 5.23% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern.
Prices are trading close to the key technical support level at 272.02 (S1). After having been unable to move lower than 275.35 in the prior session, the stock found buyers again around the same price level today at 275.90.
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the nearby swing low at 274.28 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Biogen. Out of 505 times, BIIB closed higher 57.03% 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 58.02% with an average market move of 1.53%.