CTSH breaks below Thursday's low
Cognizant Technology Solutions Corporation (CTSH) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CTSH finished the week 2.53% higher at 51.45 after edging lower $0.29 (-0.56%) today on low volume, underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 51.71, Cognizant Technology confirmed its breakout through the previous session low after trading up to $0.79 below it intraday.
Daily Candlestick Chart (CTSH as at May 22, 2020):
Friday's trading range has been $1.12 (2.15%), that's below the last trading month's daily average range of $1.78. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CTSH.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
After trading as low as 50.92 during the day, the market found support at the 50-day moving average at 51.23. The last time this happened on December 20, 2019, CTSH actually lost -0.93% on the following trading day.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the close-by swing high at 53.59 where further buy stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Cognizant Technology. Out of 379 times, CTSH closed higher 54.62% 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 60.42% with an average market move of 0.65%.