ADS breaks back above 100-day moving average
Alliance Data Systems Corporation (ADS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
ADS finished Wednesday at 47.05 surging $2.69 (6.06%) on high volume, significantly outperforming the S&P 500 (-0.46%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 46.89, the market confirmed its breakout through the previous session high after trading up to $0.78 above it intraday.
Daily Candlestick Chart (ADS as at Sep 16, 2020):
Wednesday's trading range has been $3.37 (7.57%), that's far above the last trading month's daily average range of $2.16. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ADS. Prices continued to consolidate within a tight trading range between 43.91 and 47.68 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the White Candle.
The share managed to close back above the 100-day moving average at 46.21. Prices are trading close to the key technical resistance level at 48.40 (R1). After having been unable to move lower than 44.26 in the prior session, Alliance Data found buyers again around the same price level today at 44.30. The last time this happened on September 3rd, ADS gained 6.18% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 47.68 where further buy stops might get activated. As prices are trading close to September's high at 48.40, upside momentum could speed up should the stock mark new highs for the month.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 50" stand out. Its common bullish interpretation has been confirmed for Alliance Data. Out of 81 times, ADS closed higher 56.79% 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 66.67% with an average market move of 0.80%.