LH closes within previous day's range after lackluster session
Laboratory Corporation of America Holdings (LH) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
LH ended the week 1.63% higher at 170.16 after losing $2.16 (-1.25%) today on low volume, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. 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 (LH as at May 22, 2020):
Friday's trading range has been $3.68 (2.13%), that's below the last trading month's daily average range of $7.34. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for LH. Prices continued to consolidate within a tight trading range between 169.33 and 174.11 where it has been caught now for the last three trading days.
Despite a strong opening the market 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 Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on April 16th, LH actually gained 7.21% on the following trading day.
The stock found buyers again today around 169.33 for the third trading day in a row after having found demand at 169.57 in the previous session and at 169.66 two days ago.
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 nearby swing high at 174.11 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 164.11 where further sell stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Laboratory. Out of 58 times, LH closed higher 58.62% 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 65.52% with an average market move of 1.15%.