UHS pushes through 100-day moving average
Universal Health Services Inc. (UHS) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
UHS ended the week -2.2% lower at 122.54 after gaining $1.69 (1.4%) today on high volume, slightly underperforming the S&P 500 (1.42%). Trading up to $0.89 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (UHS as at Oct 12, 2018):
Friday's trading range has been $1.97 (1.62%), that's slightly below the last trading month's daily average range of $2.26. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for UHS.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving lower in the previous session, the share managed to close higher but below the prior day's open, forming a bullish Harami Candle.
Universal Health managed to break above the 100-day moving average at 120.97 today. When this moving average was crossed above the last time on July 25th, UHS gained 5.76% on the following trading day. Prices are trading close to the key technical resistance level at 123.05 (R1). After having been unable to move lower than 120.73 in the previous session, the stock found buyers again around the same price level today at 120.89.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 125.98.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the nearby swing low at 120.73 where further sell stops might get activated. Trading close to August's low at 119.12 we could see further downside momentum if potential sell stops at the level get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Harami Candle" stand out. Its common bullish interpretation has been confirmed for Universal Health. Out of 40 times, UHS closed higher 55.00% 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 77.50% with an average market move of 2.21%.