RMD fails to close above 20-day moving average
ResMed Inc. (RMD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
RMD finished Wednesday at 174.06 losing $1.49 (-0.85%), slightly underperforming the S&P 500 (-0.46%). Closing below Tuesday's low at 175.06, the share confirmed its breakout through the previous session low after trading up to $1.93 below it intraday.
Daily Candlestick Chart (RMD as at Sep 16, 2020):
Wednesday's trading range has been $4.56 (2.58%), that's slightly above the last trading month's daily average range of $4.24. 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 lower than usual for RMD.
Regardless of a strong opening ResMed closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on September 3rd, RMD lost -2.42% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Tweezer Top which is known as bullish pattern and one bearish pattern, the Black Candle.
After spiking up to 177.69 during the day, the market found resistance at the 20-day moving average at 177.43. After having been unable to move above 177.69 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 177.69.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could accelerate should prices move below the close-by swing low at 170.86 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Tweezer Top" stand out. Its common bullish interpretation has been confirmed for ResMed. Out of 5 times, RMD closed higher 60.00% 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 60.00% with an average market move of 3.45%.