Market decline

Quest Diagnostics reports in a falling bear market

Quest Diagnostics Incorporated (DGX) reports earnings ahead of the market opens on Tuesday, July 23. The stock has recovered from a 32% decline in the bear market from its historic intraday high of $ 116.49 set in June 2018 to its low on December 26. of $ 78.95. The stock finished last week at $ 99.28, up 19.2% so far in 2019 and in bullish territory 25.8% above its Dec 26 low.

Quest Diagnostics provides clinical laboratory services, including blood tests. The company continues to modernize its clinics with online improvements to its login process and reductions in paperwork. As Quest Diagnostics modernizes its phlebotomy services, it is also closing low-production clinics.

Quest Diagnostics closed the first half of 2019 on June 28 at $ 101.81, which has become a key part of my proprietary analyzes. From the first half of the year, the annual pivot remains at $ 93.81, which was crossed higher on April 23. The risk level for the second half of 2019 is $ 116.59. The value level for July is $ 90.68. The third quarter value level is $ 85.97.

The daily chart shows a “golden cross” and the weekly chart will likely be lowered to negative this week. Basically, Quest Diagnostics comes reasonably priced with a P / E ratio of 16.04 and a dividend yield of 2.14%, according to Macrotrends.

Quest releases its quarterly results ahead of the opening bell on Tuesday, July 23, and analysts expect the company to post earnings per share of $ 1.70. Wall Street expects operational improvements to accelerate growth. However, second quarter results are expected to decline. The company recently announced a data breach that exposed the personal information of up to 11.9 million patients.

Quest Diagnostics Daily Graph

Refinitiv XENITH

Quest’s daily chart shows the formation of a “golden cross” on June 6, when the 50-day simple moving average broke the 200-day SMA to indicate higher prices are ahead. This signal followed the stock to its 2019 high of $ 104.20 on July 11. Since then, the stock has moved below its 50-day SMA at $ 99.70 and above its 200-day SMA at $ 92.79.

The semi-annual risk level is above the chart at $ 116.58. The horizontal lines show the annual value level at $ 93.81, the monthly value level at $ 90.88, and the quarterly value level at $ 85.97.

The weekly chart for Quest Diagnostics

Refinitiv XENITH

Quest Diagnostics’ weekly chart will be lowered to negative this week, with the stock falling below its modified five-week moving average of $ 99.71 and above its 200-week SMA, or “mean reversion,” at 91 , $ 91.

The 12 x 3 x 3 Weekly Slow Stochastic Reading is expected to drop to 79.60 this week, falling below the overbought line of 80.00. At the July 11 high, that reading was 93.87, above the 90.00 threshold as a “swelling parabolic bubble”, which is now bursting. At the start of 2019, the stochastic reading was 8.87 with the reading below 10.00 making the stock “too cheap to ignore”. These extreme readings have successfully helped traders capture the volatility of stock prices.

Commercial strategy : Buy Quest Diagnostics stocks when weak at annual, monthly and quarterly value levels at $ 93.81, $ 90.68 and $ 85.97, respectively. Reduce holdings by force to the half-yearly risky level at $ 116.58.

How to use my value levels and risk levels: Value levels and risk levels are based on the last nine weekly, monthly, quarterly, semi-annual and annual closings. The first set of levels was based on the December 31 closings. The original annual level remains in play. The weekly level changes every week. The monthly level was changed at the end of each month, most recently on June 28. The quarterly level was also changed at the end of June.

My theory is that nine years of volatility between close is enough to assume that all possible bullish or bearish events for the stock are factored in. a level at risk. A pivot is a level of value or a level of risk that has been violated in its time horizon. Pivots act like magnets that have a high probability of being retested before their time horizon expires.

How to use the weekly slow stochastic readings of 12 x 3 x 3: My choice to use weekly slow stochastic 12 x 3 x 3 readings was based on backtesting many methods of reading stock price momentum with the goal of finding the combination that resulted in the fewest false signals. I did this after the 1987 stock market crash, so I’ve been happy with the results for over 30 years.

The stochastic reading covers the past 12 weeks of highs, lows and closings for the stock. There is a gross calculation of the differences between the high and the low compared to the fences. These levels are changed for fast reading and slow reading, and I have found slow reading to work best.

Stochastic reading scales are between 00.00 and 100.00, with readings above 80.00 considered overbought and readings below 20.00 considered oversold. Recently I have noticed that stocks tend to peak and fall 10-20% and more soon after a reading goes above 90.00, so I call this a “swelling parabolic bubble” because a bubble still bursts. I also refer to a reading below 10.00 as “too cheap to ignore”.

Disclosure: The author has no position in any of the mentioned stocks and does not intend to initiate any positions within the next 72 hours.