ATVI closes below its opening price unable to hold early session gains
Activision Blizzard Inc (ATVI) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, ATVI finished the week -2.1% lower at 77.92 after surging $4.07 (5.51%) today on high volume, significantly outperforming the Nasdaq 100 (2.77%). This is the biggest single-day gain in over a month. Today's close at 77.92 marks the highest recorded closing price since October 5th. Trading $1.85 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (ATVI as at Oct 12, 2018):
Friday's trading range has been $3.70 (4.72%), that's far above the last trading month's daily average range of $2.08. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ATVI.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
The market managed to break above the 100-day moving average at 75.80 today for the first time since September 7th. After spiking up to 80.25 during the day, the stock found resistance at the 20-day moving average at 79.90.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 79.90. The last time this happened on Tuesday, ATVI actually lost -5.23% on the following trading day.
While Activision Blizzard is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Activision Blizzard. Out of 123 times, ATVI closed higher 56.10% 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 65.85% with an average market move of 2.03%.