VAR dominated by bears dragging the market lower throughout the day
Varian Medical Systems Inc. (VAR) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
VAR finished the week 1.46% higher at 100.97 after losing $7.25 (-6.7%) today, strongly underperforming the S&P 500 (-3.37%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 104.69, the share confirmed its breakout through the previous session low after trading up to $4.36 below it intraday.
Daily Candlestick Chart (VAR as at Mar 27, 2020):
Friday's trading range has been $4.53 (4.32%), that's far below the last trading month's daily average range of $7.23. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for VAR.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on Monday, VAR actually gained 13.93% on the following trading day.
Prices broke below the key technical support level at 102.64 (now R1), which is likely to act as resistance going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Varian Medical. Out of 56 times, VAR closed higher 60.71% 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 60.71% with an average market move of 0.79%.