ADS finds buyers again around 210.40
Alliance Data Systems (ADS) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
ADS finished the week -7.7% lower at 213.52 after gaining $1.83 (0.86%) today, underperforming the S&P 500 (1.42%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (ADS as at Oct 12, 2018):
Friday's trading range has been $6.81 (3.16%), that's above the last trading month's daily average range of $4.83. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for ADS.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 210.34 (S1). After having been unable to move lower than 210.34 in the previous session, Alliance Data found buyers again around the same price level today at 210.40. The last time this happened on September 21st, ADS actually lost -1.56% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally 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 up towards the center of the Bollinger Bands at 235.72.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could accelerate should prices move below the nearby swing low at 210.34 where further sell stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for Alliance Data. Out of 518 times, ADS closed higher 55.21% 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 60.62% with an average market move of 0.91%.