BAC finds buyers at key support level
Bank of America Corporation (BAC) Technical Analysis Report for Dec 06, 2018 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BAC ended Thursday at 26.28 losing $0.71 (-2.63%) on high volume, strongly underperforming the S&P 500 (-0.15%) ahead of tomorrow's NFP report. Today's close at 26.28 marks the lowest recorded closing price since October 24th. Trading up to $0.70 lower after the open, the share managed to reverse during the session as bulls took control ending the day above 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 (BAC as at Dec 06, 2018):
Thursday's trading range has been $0.79 (3.01%), that's slightly above the last trading month's daily average range of $0.70. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for BAC.
One bullish candlestick pattern matches today's price action, the Takuri Line.
After trading down to 25.53 earlier during the day, the market bounced off the key technical support level at 26.08 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on Tuesday, BAC actually lost -2.63% on the following trading day. Prices are trading close to the key technical resistance level at 26.93 (R1).
Crossing below the lower Bollinger Band for the first time since October 24th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 27.78 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Takuri Line" stand out. Its common bullish interpretation has been confirmed for Bank of. Out of 55 times, BAC closed higher 58.18% 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 nine trading days, showing a win rate of 54.55% with an average market move of -0.01%.