CAH closes above its opening price after recovering from early selling pressure
Cardinal Health Inc. (CAH) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CAH ended the week 9.48% higher at 53.59 after gaining $0.41 (0.77%) today on low volume, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 53.59 marks the highest recorded closing price since March 4th. Trading up to $0.41 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 53.46, the stock confirmed its breakout through the previous session high after trading up to $0.24 above it intraday.
Daily Candlestick Chart (CAH as at May 22, 2020):
Friday's trading range has been $1.06 (2.0%), that's below the last trading month's daily average range of $1.82. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CAH.
Three candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and one bearish pattern, the Bearish Hikkake Pattern.
Prices are trading close to the key technical resistance level at 53.76 (R1). Cardinal Health ran into sellers again today around 53.70 for the third trading day in a row after having found sellers at 53.46 in the prior session and at 53.76 two days ago. The last time this happened on March 27th, CAH actually gained 9.15% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 53.76 where further buy stops could get activated. Trading close to March's high at 56.09 we might see further upside momentum if potential buy stops at the level get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for Cardinal Health. Out of 79 times, CAH closed higher 59.49% 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 two trading days, showing a win rate of 58.23% with an average market move of 0.22%.