BBD finds buyers at key support level
Banco Bradesco Sa American Depositary Shares (BBD) Technical Analysis Report for Jan 16, 2020 | by Techniquant Editorial Team
BBD ended Thursday at 8.24 gaining $0.12 (1.48%), outperforming the S&P 500 (0.84%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (BBD as at Jan 16, 2020):
Thursday's trading range has been $0.14 (1.71%), that's slightly below the last trading month's daily average range of $0.15. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BBD.
After moving lower in the previous session, the share managed to close higher but below the prior day's open, forming a bullish Harami Candle.
After trading down to 8.15 earlier during the day, the market bounced off the key technical support level at 8.17 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 8.36 (R1). After having been unable to move above 8.26 in the previous session, Banco Bradesco ran into sellers again around the same price level today, failing to move higher than 8.29.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 8.72. The last time this happened on October 3, 2019, BBD gained 2.04% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling might accelerate should prices move below the close-by swing low at 8.07 where further sell stops could get activated. Further selling might move prices lower should the market test December's nearby low at 7.91.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the lower Bollinger Band" stand out. Its common bullish interpretation has been confirmed for Banco Bradesco. Out of 70 times, BBD closed higher 51.43% 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 52.86% with an average market move of 0.69%.