UHS breaks below 50-day moving average for the first time since November 5th
Universal Health Services Inc. (UHS) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, UHS finished the week -8.53% lower at 126.22 after tanking $5.42 (-4.12%) today on high volume, strongly underperforming the S&P 500 (-2.33%) following today's NFP report. This is the biggest single-day loss in over a month. The last time we've seen such an unusually strong single-day loss on October 26th, UHS actually gained 2.72% on the following trading day. Today's close at 126.22 marks the lowest recorded closing price since November 6th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 127.68, the market confirmed its breakout through the previous session low after trading up to $1.98 below it intraday.
Daily Candlestick Chart (UHS as at Dec 07, 2018):
Friday's trading range has been $6.18 (4.71%), that's far above the last trading month's daily average range of $3.41. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for UHS.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 125.70 during the day, Universal Health found support at the 100-day moving average at 125.97. The stock closed below the 50-day moving average at 127.36 for the first time since November 5th.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Further selling might move prices lower should the market test November's close-by low at 121.83.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Universal Health. Out of 72 times, UHS closed higher 61.11% 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 59.72% with an average market move of 0.89%.