ADS ends the day on a bearish note closing near the low of the day
Alliance Data Systems Corporation (ADS) Technical Analysis Report for May 29, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ADS ended the month -7.47% lower at 46.33 after losing $2.67 (-5.45%) today, significantly underperforming the S&P 500 (0.48%). Trading $1.49 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Wednesday, ADS lost -5.75% on the following trading day. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (ADS as at May 29, 2020):
Friday's trading range has been $3.05 (6.4%), that's slightly below the last trading month's daily average range of $3.54. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ADS.
Prices broke below the key technical support level at 46.44 (now R1), which is likely to act as resistance going forward.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Alliance Data. Out of 296 times, ADS closed higher 52.03% 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 56.08% with an average market move of 0.32%.