IRTC unable to break through key resistance level
iRhythm Technologies Inc. (IRTC) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
IRTC finished the month 7.41% higher at 124.48 after losing $3.42 (-2.67%) today, strongly underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (IRTC as at Jul 31, 2020):
Friday's trading range has been $7.81 (6.11%), that's above the last trading month's daily average range of $6.32. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IRTC.
Unable to break through the key technical resistance level at 129.59 (R1), the market closed below it after spiking up to 129.66 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 122.86 in the previous session, iRhythm Technologies found buyers again around the same price level today at 121.85.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 118.87. The last time this happened on July 24th, IRTC actually gained 2.55% on the following trading day.
The share shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might speed up should prices move below the close-by swing low at 120.00 where further sell stops could get triggered. With prices trading close to this year's high at 136.55, upside momentum might accelerate should the stock be able to break out to new highs for the year. Further buying could move prices higher should the market test June's nearby high at 133.40.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for iRhythm Technologies. Out of 40 times, IRTC closed higher 62.50% 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 60.00% with an average market move of 1.44%.