MDRX breaks below key technical support level
Allscripts Healthcare Solutions Inc. (MDRX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, MDRX ended the week -2.53% lower at 8.85 after losing $0.21 (-2.32%) today, strongly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing below Thursday's low at 8.98, the share confirmed its breakout through the previous session low after trading up to $0.24 below it intraday.
Daily Candlestick Chart (MDRX as at Feb 14, 2020):
Friday's trading range has been $0.37 (4.07%), that's far above the last trading month's daily average range of $0.28. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MDRX.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on February 4th, MDRX actually gained 5.09% on the following trading day.
Prices broke below the key technical support level at 8.92 (now R1), which is likely to act as resistance going forward. After having been unable to move above 9.12 in the prior session, the stock ran into sellers again around the same price level today, missing to move higher than 9.11.
While the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 8.50, downside momentum might speed up should Allscripts Healthcare break out to new lows for the year. As prices are trading close to February's low at 8.59, downside momentum could accelerate should MDRX mark new lows for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Allscripts Healthcare. Out of 254 times, MDRX closed higher 51.57% 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 five trading days, showing a win rate of 49.21% with an average market move of 0.09%.