VAR fails to close above 50-day moving average
Varian Medical Systems Inc. (VAR) Technical Analysis Report for Jul 13, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, VAR finished Monday at 119.25 gaining $0.33 (0.28%), notably outperforming the S&P 500 (-0.94%). Trading $2.93 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (VAR as at Jul 13, 2020):
Monday's trading range has been $3.40 (2.85%), that's slightly below the last trading month's daily average range of $3.47. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for VAR.
Four candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern, two bearish patterns, the Bearish Hikkake Pattern and the Gravestone Doji and one neutral pattern, the Doji.
After spiking up to 122.27 during the day, the stock found resistance at the 50-day moving average at 119.69. The last time this happened on October 11, 2019, VAR actually gained 1.80% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might accelerate should prices move below the close-by swing low at 117.07 where further sell stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Gravestone Doji" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Varian Medical. Out of 40 times, VAR closed higher 60.00% 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 72.50% with an average market move of 0.52%.