ADS closes below its opening price unable to hold early session gains
Alliance Data Systems Corporation (ADS) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ADS finished the week -2.92% lower at 102.83 after losing $0.66 (-0.64%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $1.37 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (ADS as at Feb 14, 2020):
Friday's trading range has been $2.03 (1.96%), that's below the last trading month's daily average range of $2.74. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ADS.
Prices broke below the key technical support level at 103.05 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 102.58 in the prior session, Alliance Data found buyers again around the same price level today at 102.74. The last time this happened on Tuesday, ADS gained 0.91% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling could accelerate should prices move below the close-by swing low at 102.58 where further sell stops might get triggered. With prices trading close to this year's low at 100.15, downside momentum could speed up should the market break out to new lows for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Alliance Data. Out of 522 times, ADS closed higher 55.17% 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 57.28% with an average market move of 0.28%.