CTSH rises to highest close since February 6th
Cognizant Technology Solutions Corporation (CTSH) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, CTSH finished Wednesday at 70.72 gaining $0.59 (0.84%), strongly outperforming the Nasdaq 100 (-1.67%). Today's close at 70.72 marks the highest recorded closing price since February 6th. Trading $0.90 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 prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CTSH as at Sep 16, 2020):
Wednesday's trading range has been $1.75 (2.47%), that's slightly above the last trading month's daily average range of $1.51. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CTSH.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns. The last time a Bearish High-Wave Candle showed up on March 12th, CTSH actually gained 7.43% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 67.44.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Cognizant Technology. Out of 382 times, CTSH closed higher 54.71% 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 59.42% with an average market move of 0.64%.