ATVI finds buyers at key support level
Activision Blizzard Inc (ATVI) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
ATVI finished Wednesday at 79.99 losing $1.76 (-2.15%), slightly underperforming the Nasdaq 100 (-1.67%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ATVI as at Sep 16, 2020):
Wednesday's trading range has been $2.56 (3.13%), that's above the last trading month's daily average range of $2.11. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ATVI.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 79.83 earlier during the day, the share bounced off the key technical support level at 79.91 (S1). The failure to close below the support could increase that levels importance as support going forward. The market closed back below the 50-day moving average at 81.44. After having been unable to move lower than 79.78 in the previous session, Activision Blizzard found buyers again around the same price level today at 79.83. The last time this happened on September 8th, ATVI gained 4.48% on the following trading day.
Although the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the nearby swing low at 77.63 where further sell stops might get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Activision Blizzard. Out of 157 times, ATVI closed higher 59.24% 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 67.52% with an average market move of 2.08%.