RMD stuck within tight trading range
ResMed Inc. (RMD) Technical Analysis Report for Aug 12, 2020 | by Techniquant Editorial Team
RMD finished Wednesday at 175.84 gaining $2.86 (1.65%), slightly outperforming the S&P 500 (1.4%). Closing above Tuesday's high at 175.64, the market confirmed its breakout through the prior session high after trading up to $1.73 above it intraday.
Daily Candlestick Chart (RMD as at Aug 12, 2020):
Wednesday's trading range has been $3.63 (2.09%), that's slightly below the last trading month's daily average range of $4.44. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for RMD. Prices continued to consolidate within a tight trading range between 171.69 and 177.37 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical support level at 172.06 (S1).
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 195.67. The last time this happened on March 24th, RMD gained 0.48% on the following trading day.
Though the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the nearby swing low at 171.69 where further sell stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the lower Bollinger Band" stand out. Its common bullish interpretation has been confirmed for ResMed. Out of 57 times, RMD closed higher 57.89% 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 64.91% with an average market move of 2.20%.