DVA plummets, losing $3.73 (-4.09%) within a single day on high volume
DaVita Inc. (DVA) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DVA finished the month 10.42% higher at 87.39 after tanking $3.73 (-4.09%) today on high volume, significantly underperforming the S&P 500 (0.77%) following Thursday's earnings report. This is the biggest single-day loss in over three months. Closing below Thursday's low at 88.27, the market confirmed its breakout through the previous session low after trading up to $2.56 below it intraday.
Daily Candlestick Chart (DVA as at Jul 31, 2020):
DVA reported earnings of $1.95 per share after Thursday's market close. With analysts having expected an EPS of $1.28, DaVita Inc. topped market expectations by 52.3%. The company's last earnings report was released on May 5, 2020, when DaVita Inc. reported earnings of $1.83 per share topping market expectations by 24.5%.
Friday's trading range has been $6.45 (7.04%), that's far above the last trading month's daily average range of $2.37. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for DVA.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Notwithstanding a strong opening the share closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on July 13th, DVA actually gained 2.99% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 85.71 earlier during the day, DaVita bounced off the key technical support level at 86.30 (S1). The failure to close below the support could increase that levels significance as support going forward. Unable to break through the key technical resistance level at 91.69 (R1), the stock closed below it after spiking up to 92.16 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. DVA ran into sellers again today around 92.16 for the third trading day in a row after having found sellers at 91.61 in the previous session and at 91.69 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post Earnings Report" stand out. Though it is usually interpreted as neutral, it has actually shown to be bearish for DaVita. Out of 31 times, DVA closed lower 61.29% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.84% with an average market move of -0.92%.