DHR breaks below key technical support level
Danaher Corporation (DHR) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DHR ended Tuesday at 128.18 tanking $2.32 (-1.78%) on high volume, strongly underperforming the S&P 500 (0.05%). This is the biggest single-day loss in over three weeks. The last time we've seen such an unusually strong single-day loss on December 24, 2018, DHR actually gained 5.39% on the following trading day. Today's close at 128.18 marks the lowest recorded closing price since March 18th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 129.68, the market confirmed its breakout through the prior session low after trading up to $1.86 below it intraday.
Daily Candlestick Chart (DHR as at Apr 16, 2019):
Tuesday's trading range has been $3.88 (2.95%), that's far above the last trading month's daily average range of $1.86. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for DHR.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 128.79 (now R1), which is likely to act as resistance going forward. After having been unable to move above 131.93 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 131.70.
Crossing below the lower Bollinger Band for the first time since December 24, 2018, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 130.87 or signal the beginning of a strong momentum breakout leading to even lower prices.
Though the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Danaher. Out of 307 times, DHR closed higher 62.54% 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 63.19% with an average market move of 1.28%.