BAC closes within prior day's range after lackluster session
Bank of America Corporation (BAC) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BAC ended the week 0.69% higher at 34.85 after losing $0.06 (-0.17%) today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (BAC as at Feb 14, 2020):
Friday's trading range has been $0.25 (0.72%), that's far below the last trading month's daily average range of $0.49. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BAC.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on February 3rd, BAC actually gained 1.97% on the following trading day.
Unable to break through the key technical resistance level at 34.89 (R1), the stock closed below it after spiking up to 34.95 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 34.55 where further sell stops might get activated. With prices trading close to this year's high at 35.67, upside momentum could accelerate should Bank of be able to break out to new highs for the year.
Among the four 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 Bank of. Out of 297 times, BAC closed higher 50.17% 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 51.85% with an average market move of 0.45%.