CVS finds buyers at key support level
CVS Health Corporation (CVS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
CVS ended Wednesday at 57.48 gaining $0.48 (0.84%) on high volume, strongly outperforming the S&P 500 (-0.46%). Trading up to $1.10 lower after the open, CVS Health managed to reverse during the session as bulls took control ending the day above its opening price. 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 Sep 16, 2020):
Wednesday's trading range has been $1.75 (3.06%), that's slightly above the last trading month's daily average range of $1.39. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for CVS.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top and the Takuri Line which are both known as bullish patterns. The last time a Bullish Spinning Top showed up on August 13th, CVS gained 1.50% on the following trading day.
After trading down to 56.10 earlier during the day, the market bounced off the key technical support level at 57.06 (S1). The failure to close below the support might increase that levels significance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 58.61 where further buy stops might get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for CVS Health. Out of 428 times, CVS closed higher 58.18% 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 56.54% with an average market move of 0.22%.