UHS finds buyers at key support level
Universal Health Services Inc. (UHS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
UHS finished the week 12.46% higher at 104.17 after losing $1.40 (-1.33%) today, significantly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (UHS as at May 22, 2020):
Friday's trading range has been $4.90 (4.63%), that's slightly above the last trading month's daily average range of $4.76. 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 slightly higher than usual for UHS. Prices continued to consolidate within a tight trading range between 100.28 and 106.15 where it has been caught now for the last three trading days.
After trading down to 101.20 earlier during the day, the market bounced off the key technical support level at 102.64 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move lower than 101.93 in the prior session, Universal Health found buyers again around the same price level today at 101.20. The last time this happened on May 11th, UHS actually lost -5.03% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 106.15 where further buy stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Universal Health. Out of 469 times, UHS closed higher 54.58% 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 58.00% with an average market move of 0.80%.