CAH dominated by bulls lifting the market higher throughout the day
Cardinal Health Inc. (CAH) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CAH ended Thursday at 45.40 gaining $3.15 (7.46%), significantly outperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CAH as at Mar 26, 2020):
Thursday's trading range has been $3.85 (9.03%), that's slightly above the last trading month's daily average range of $3.62. 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 higher than usual for CAH. Prices continued to consolidate within a tight trading range between 40.97 and 46.19 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 41.82 earlier during the day, Cardinal Health bounced off the key technical support level at 42.16 (S1). The failure to close below the support could increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 46.19 (R1). After having been unable to move lower than 41.93 in the previous session, the market found buyers again around the same price level today at 41.82. The last time this happened on March 20th, CAH actually lost -5.38% on the following trading day.
While the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 46.19 where further buy stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Cardinal Health. Out of 443 times, CAH closed higher 57.56% 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 55.30% with an average market move of 0.36%.