CVS dominated by bulls lifting the market higher throughout the day
CVS Health Corporation (CVS) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
CVS finished Thursday at 58.31 gaining $4.67 (8.71%) on high volume, significantly outperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 57.53, CVS Health confirmed its breakout through the previous session high after trading up to $0.92 above it intraday.
Daily Candlestick Chart (CVS as at Mar 26, 2020):
Thursday's trading range has been $6.16 (11.48%), that's far above the last trading month's daily average range of $4.05. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CVS.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on August 13, 2019, CVS actually lost -2.16% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical resistance level at 59.06 (R1). The market was bought again around 52.29 after having seen lows at 52.71, 52.86 and 52.04 in the last three trading sessions. Obviously there is something going on at that level.
While 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.
Buying might speed up should prices move above the nearby swing high at 59.64 where further buy stops could get triggered. 2019's low at 51.72 is within reach and we might see further downside momentum should the stock break out beyond.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Its common bullish interpretation has been confirmed for CVS Health. Out of 21 times, CVS closed higher 61.90% 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 76.19% with an average market move of 2.13%.