VAR closes higher for the 3rd day in a row
Varian Medical Systems Inc. (VAR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, VAR ended the month 16.49% higher at 142.72 after surging $4.40 (3.18%) today on high volume, notably outperforming the S&P 500 (0.77%). Today's close at 142.72 marks the highest recorded closing price since February 21st. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 138.69, the market confirmed its breakout through the previous session high after trading up to $4.16 above it intraday.
Daily Candlestick Chart (VAR as at Jul 31, 2020):
Friday's trading range has been $6.73 (4.88%), that's far above the last trading month's daily average range of $3.57. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for VAR.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
Buyers managed to take out the key technical resistance level at 138.81 (now S1), which is likely to act as support going forward. The last time this happened on Wednesday, VAR gained 1.30% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 127.46.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 150.06, upside momentum could accelerate should the share be able to break out to new highs for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Varian Medical. Out of 123 times, VAR closed higher 61.79% 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 56.91% with an average market move of 0.49%.