Bausch Health Companies Inc (BHC.TO) - February 23, 2024 (Daily Stock Report)


Bausch Health Companies, Inc. (BHC.TO) has completed a big round trip within the relative strength rankings of the SIA S&P/TSX Composite Index Report. A steady tumble down the rankings over the second half of last year bottomed out at the end of December deep in the red zone. This year has been the opposite, with BHC.TO steadily working its way back up the rankings, leaving the red zone and climbing up through the yellow zone.

Yesterday Bausch Health returned to the Green Favored Zone for the first time since September. The shares jumped 33 spots yesterday to 55th place, boosted by a 7.3% one-day gain in the stock price, and they are up 60 positions in the last month.

Candlestick Chart Shows a Big Base Building:

Back in 2022, Bausch Health (BHC.TO) shares fell off a cliff, plunging from near $35.00 down toward $5.00 before finally bottoming out. Since the summer of 2022, the shares have been trending sideways, building a base for recovery. In recent weeks, signs of accumulation have resumed with the shares trending up off a higher low set near $9.00 last fall and holding above their 10-week moving average.

Currently, BHC.TO is trading at its highest level since last summer. A close above $13.00 would complete a large pending ascending triangle base and signal the start of a new uptrend. Should that occur, next potential resistance may appear near $15.00 or $19.00 based on measured moves, then the $20.00 round number. Initial support appears at the 10-week average near $11.00.

Point and Figure Chart Breaks Out of a Downtrend:

Bausch Health (BHC.TO) shares staged a potentially significant breakout yesterday. After selling off hard over the first eight months of 2022 and then bouncing back a bit toward the end of that year, BHC.TO spent 2023 trending sideways and building a base for recovery.

The shares spent the last few months of 2023 in a downswing but bottomed out over the last six weeks of the year. Since the beginning of this year, renewed accumulation has become clearer with the shares completing two bullish Double Top breakouts that have combined into a Bullish Catapult.

Yesterday, BHC.TO snapped a 45-degree downtrend line that had been in place for two years, signaling the start of a new uptrend. This would be confirmed if the shares can close above initial resistance at recent column highs near $13.00 and $13.55. Should that occur, next potential resistance may emerge near $14.35 based on a vertical count, and $15.25 based on a horizontal count.

With a bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 9 out of 10, BHC.TO is exhibiting short-term strength against the asset classes.

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