CVS dominated by bears dragging the market lower throughout the day
CVS Health Corporation (CVS) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, CVS ended the week -7.62% lower at 74.09 after tanking $2.48 (-3.24%) today, underperforming the S&P 500 (-2.33%) following today's NFP report. This is the biggest single-day loss in over two weeks. Today's close at 74.09 marks the lowest recorded closing price since November 5th. The bears were in full control today, moving the market lower 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 (CVS as at Dec 07, 2018):
Friday's trading range has been $2.70 (3.54%), that's above the last trading month's daily average range of $2.00. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for CVS.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 72.82 (S1). The share closed below the 100-day moving average at 74.40 for the first time since October 29th. When this moving average was crossed below the last time on October 24th, CVS actually gained 1.23% on the following trading day. After having been unable to move lower than 73.89 in the previous session, the market found buyers again around the same price level today at 73.68.
Crossing below the lower Bollinger Band for the first time since October 24th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 78.57 or signal the beginning of a strong momentum breakout leading to even lower prices.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Further selling might move prices lower should the market test November's nearby low at 72.26.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for CVS Health. Out of 119 times, CVS closed higher 62.18% 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 60.50% with an average market move of 1.49%.