VAR closes lower for the 2nd day in a row
Varian Medical Systems Inc. (VAR) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, VAR finished the week 1.21% higher at 115.41 after edging lower $0.35 (-0.3%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. 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 (VAR as at May 22, 2020):
Friday's trading range has been $2.25 (1.94%), that's below the last trading month's daily average range of $3.53. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for VAR.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
The market closed below the 20-day moving average at 115.69 for the first time since April 21st. When this moving average was crossed below the last time on April 21st, VAR actually gained 3.00% on the following trading day.
Varian Medical shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to May's low at 109.61, downside momentum might speed up should the stock mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Varian Medical. Out of 211 times, VAR closed higher 56.87% 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 58.77% with an average market move of 0.71%.