ADS breaks below Thursday's low
Alliance Data Systems Corporation (ADS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ADS finished the week 10.14% higher at 42.05 after losing $1.01 (-2.35%) today on low volume, significantly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 42.29, the share confirmed its breakout through the previous session low after trading up to $0.45 below it intraday.
Daily Candlestick Chart (ADS as at May 22, 2020):
Friday's trading range has been $1.89 (4.36%), that's far below the last trading month's daily average range of $3.47. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ADS.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on April 16th, ADS actually gained 14.73% on the following trading day.
After having been unable to move lower than 42.29 in the prior session, the market found buyers again around the same price level today at 41.84.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 46.28 where further buy stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Alliance Data. Out of 55 times, ADS closed higher 60.00% 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 74.55% with an average market move of 3.22%.