BBD closes higher for the 2nd day in a row
Banco Bradesco Sa American Depositary Shares (BBD) Technical Analysis Report for Jan 23, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, BBD ended Thursday at 8.28 gaining $0.26 (3.24%) on high volume, strongly outperforming the S&P 500 (0.11%). Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (BBD as at Jan 23, 2020):
Thursday's trading range has been $0.36 (4.46%), that's far above the last trading month's daily average range of $0.17. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for BBD.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
Buyers managed to take out the key technical resistance level at 8.19 (now S1), which is likely to act as support going forward. The last time this happened on January 14th, BBD actually lost -3.10% on the following trading day. After spiking up to 8.34 during the day, the stock found resistance at the 100-day moving average at 8.32. After having been unable to move lower than 7.95 in the prior session, the share found buyers again around the same price level today at 7.98.
Although the market 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 speed up should prices move above the close-by swing high at 8.49 where further buy stops might get triggered. Further selling could move prices lower should the market test December's nearby low at 7.91.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 100" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Banco Bradesco. Out of 23 times, BBD closed higher 60.87% 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 47.83% with an average market move of 0.31%.