Stock Of The Day – Bullish Capitulation In Becton, Dickinson?

Shares of Becton, Dickinson and Company BDX are coming back a little on Friday. This follows Thursday’s more than 18% drop.

There may have been a capitulation, which could be bullish for the stock. This is why our technical analysis team has made it our Stock of the Day.

The company reported earnings of $3.35 per share. This was ahead of consensus estimates of $3.28.

But the guidance is what brought in the sellers.

Concerning the tariffs, Becton said, “International trade policies, trade restrictions and tariffs are rapidly evolving and there can be no assurance as to how the landscape may change and what the ultimate impact on our guidance and results of operations will be.”

Read Also: Apple CEO Tim Cook Warns Of $900 Million Tariff Impact In June Quarter, Expects Majority Of iPhones Sold In US To Be Made In India

Yesterday's trading may have been a capitulation; if so, the shares may move higher.

Capitulations occur when frustrated sellers stop worrying about what price they sell their shares for. They are tired of watching the price drop and make up their minds to sell regardless of where they are trading.

As a result, there was a huge volume of trades. You can see on the chart that this was the case on Thursday.

This could have bullish implications.

If all investors and traders who wanted to sell have done so, those who wish to buy will have no choice but to be willing to pay successively higher prices if they want to draw sellers back into the market. This could push the stock into an uptrend.

Many traders overcomplicate things. They forget that markets are driven by supply and demand. If there is more demand than supply, they move higher. If there is more supply than demand, they trend lower.

If a market runs out of supply, the only way that it can go is up. This may be about to happen with shares of Becton, Dickenson.

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