CTSH pushes through key technical resistance level
Cognizant Technology Solutions Corporation (CTSH) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CTSH finished Thursday at 49.82 gaining $2.13 (4.47%) on low volume, strongly underperforming the Nasdaq 100 (5.72%). Closing above Wednesday's high at 49.36, the market confirmed its breakout through the previous session high after trading up to $1.09 above it intraday.
Daily Candlestick Chart (CTSH as at Mar 26, 2020):
Thursday's trading range has been $3.02 (6.29%), that's slightly below the last trading month's daily average range of $3.59. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CTSH.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 48.46 (now S1), which is likely to act as support going forward. The last time this happened on March 17th, CTSH actually lost -5.25% on the following trading day. Prices are trading close to the key technical resistance level at 52.70 (R1).
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.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) above 80" stand out. Its common bearish interpretation has been confirmed for Cognizant Technology. Out of 310 times, CTSH closed lower 53.87% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 50.00% with an average market move of -0.11%.