UHS finds buyers again around 139.57
Universal Health Services Inc. (UHS) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
UHS ended the week 1.3% higher at 139.93 after losing $1.57 (-1.11%) today, notably underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (UHS as at Feb 14, 2020):
Friday's trading range has been $2.12 (1.5%), that's below the last trading month's daily average range of $2.62. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for UHS.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 138.05 (S1). Prices broke below the key technical support level at 140.10 (now R1), which is likely to act as resistance going forward. The last time this happened on February 7th, UHS actually gained 1.07% on the following trading day. After having been unable to move lower than 139.81 in the prior session, the share found buyers again around the same price level today at 139.57.
While the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the close-by swing low at 137.56 where further sell stops might get triggered. With prices trading close to this year's low at 136.73, downside momentum could speed up should Universal Health break out to new lows for the year. As prices are trading close to February's low at 137.03, downside momentum might accelerate should the stock mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Universal Health. Out of 464 times, UHS closed higher 52.37% 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 62.07% with an average market move of 1.41%.