RHC.AX breaks below key technical support level
Ramsay Health Care Ltd (RHC.AX) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
RHC.AX finished the week 1.05% higher at 57.92 after losing $0.89 (-1.51%) today, strongly underperforming the ASX 50 (-0.34%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 58.06, the share confirmed its breakout through the previous session low after trading up to $0.18 below it intraday.
Daily Candlestick Chart (RHC.AX as at Jan 11, 2019):
Friday's trading range has been $1.53 (2.59%), that's far above the last trading month's daily average range of $1.16. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for RHC.AX.
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. Regardless of a strong opening Ramsay Health closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 57.45 (S1). Prices broke below the key technical support level at 58.70 (now R1), which is likely to act as resistance going forward. The last time this happened on December 19, 2018, RHC.AX actually gained 1.08% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 57.21 where further sell stops might get triggered.
Among the nine 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. While it is usually interpreted as bearish, it has actually shown to be bullish for Ramsay Health. Out of 241 times, RHC.AX closed higher 59.34% 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 61.41% with an average market move of 1.19%.