LH crashes, losing $6.46 (-4.06%) within a single day on high volume
Laboratory Corporation of America Holdings (LH) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
LH ended Tuesday at 152.61 tanking $6.46 (-4.06%) on high volume, significantly underperforming the S&P 500 (0.05%). This is the biggest single-day loss in over four months. The last time we've seen such an unusually strong single-day loss on November 30, 2018, LH actually gained 1.67% on the following trading day. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 157.31, the market confirmed its breakout through the previous session low after trading up to $4.99 below it intraday.
Daily Candlestick Chart (LH as at Apr 16, 2019):
Tuesday's trading range has been $7.87 (4.91%), that's far above the last trading month's daily average range of $2.89. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for LH.
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. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
The stock closed below the 20-day moving average at 155.59 for the first time since March 28th. After having been unable to move above 159.74 in the previous session, Laboratory ran into sellers again around the same price level today, failing to move higher than 160.19.
LH shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Laboratory. Out of 12 times, LH closed higher 66.67% 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 58.33% with an average market move of 1.19%.