BAC closes within prior day's range
Bank of America Corporation (BAC) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
BAC ended Wednesday at 25.60 gaining $0.32 (1.27%), strongly outperforming the S&P 500 (-0.46%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (BAC as at Sep 16, 2020):
Wednesday's trading range has been $0.86 (3.4%), that's far above the last trading month's daily average range of $0.64. 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 BAC. Prices continued to consolidate within a tight trading range between 25.05 and 25.99 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar.
After trading as low as 25.05 during the day, the share found support at the 50-day moving average at 25.18. The last time this happened on April 30th, BAC actually lost -4.03% on the following trading day. After having been unable to move above 25.83 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 25.91.
While 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.
Buying could accelerate should prices move above the nearby swing high at 25.99 where further buy stops might get activated. Further selling could move prices lower should the market test August's close-by low at 24.69.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. Its common bullish interpretation has been confirmed for Bank of. Out of 28 times, BAC closed higher 53.57% 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 two trading days, showing a win rate of 57.14% with an average market move of -0.07%.