BMY finds buyers at key support level
Bristol-Myers Squibb Company (BMY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, BMY finished the week -5.15% lower at 60.79 after losing $0.35 (-0.57%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading $0.65 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 previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (BMY as at May 22, 2020):
Friday's trading range has been $1.07 (1.75%), that's below the last trading month's daily average range of $1.42. 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 BMY.
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.
After trading down to 60.59 earlier during the day, the stock bounced off the key technical support level at 60.62 (S1). The failure to close below the support could increase that levels significance as support going forward. The market closed back below the 100-day moving average at 60.95 for the first time since May 7th. After having been unable to move lower than 60.44 in the prior session, Bristol-Myers Squibb found buyers again around the same price level today at 60.59. The last time this happened on May 11th, BMY gained 1.10% on the following trading day.
BMY shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might speed up should prices move below the nearby swing low at 60.44 where further sell stops could get triggered. As prices are trading close to May's low at 59.68, downside momentum might accelerate should the share mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "5 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Bristol-Myers Squibb. Out of 22 times, BMY closed higher 68.18% 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 63.64% with an average market move of 2.30%.