VAR unable to break through key resistance level
Varian Medical Systems Inc. (VAR) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, VAR ended Thursday at 108.22 gaining $3.37 (3.21%), notably underperforming the S&P 500 (6.24%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (VAR as at Mar 26, 2020):
Thursday's trading range has been $7.32 (6.91%), that's slightly above the last trading month's daily average range of $7.23. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for VAR.
Prices are trading close to the key technical support level at 102.64 (S1). Unable to break through the key technical resistance level at 111.99 (R1), the market closed below it after spiking up to 112.01 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on March 19th, VAR lost -7.77% on the following trading day.
Though the stock is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) above 80" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Varian Medical. Out of 295 times, VAR closed higher 55.59% 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 55.93% with an average market move of 0.50%.