EHC rises to highest close since September 10, 2001
Encompass Health Corporation (EHC) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, EHC ended the week 3.79% higher at 82.61 after gaining $0.20 (0.24%) today on low volume, slightly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Today's close at 82.61 marks the highest recorded closing price since September 10, 2001. Trading up to $0.70 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EHC as at Feb 14, 2020):
Friday's trading range has been $1.01 (1.22%), that's below the last trading month's daily average range of $1.43. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for EHC. Prices continued to consolidate within a tight trading range between 81.29 and 83.02 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bearish Hikkake Pattern and the Hanging Man which are both known as bearish patterns. The last time a Hanging Man showed up on November 22, 2019, EHC actually gained 1.34% on the following trading day.
Prices are trading close to the key technical resistance level at 83.02 (R1). Encompass Health was sold again around 82.76 after having seen highs at 82.75, 83.02 and 82.93 in the last three trading sessions. Obviously there is something going on at that level.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 83.02 where further buy stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Encompass Health. Out of 17 times, EHC closed higher 58.82% 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 nine trading days, showing a win rate of 64.71% with an average market move of 0.18%.