BBD breaks below 50-day moving average for the first time since December 11, 2019
Banco Bradesco Sa American Depositary Shares (BBD) Technical Analysis Report for Jan 10, 2020 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, BBD ended the week -9.51% lower at 8.37 after losing $0.19 (-2.22%) today, notably underperforming the S&P 500 (-0.29%). Today's close at 8.37 marks the lowest recorded closing price since December 11, 2019. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 8.46, the market confirmed its breakout through the prior session low after trading up to $0.12 below it intraday.
Daily Candlestick Chart (BBD as at Jan 10, 2020):
Friday's trading range has been $0.29 (3.38%), that's far above the last trading month's daily average range of $0.16. 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 BBD.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Banco Bradesco closed below the 50-day moving average at 8.42 for the first time since December 11, 2019. When this moving average was crossed below the last time on December 11, 2019, BBD actually gained 2.43% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Banco Bradesco. Out of 62 times, BBD closed lower 58.06% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.84% with an average market move of -0.96%.