BBD finds buyers at key support level
Banco Bradesco Sa American Depositary Shares (BBD) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, BBD finished Thursday at 4.46 edging higher $0.09 (2.06%), significantly underperforming the S&P 500 (6.24%). 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 Mar 26, 2020):
Thursday's trading range has been $0.39 (8.63%), that's slightly below the last trading month's daily average range of $0.44. 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 notably higher than usual for BBD.
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.
After trading down to 4.24 earlier during the day, Banco Bradesco bounced off the key technical support level at 4.30 (S1). The failure to close below the support might increase that levels importance as support going forward. After having been unable to move above 4.68 in the prior session, the stock ran into sellers again around the same price level today, missing to move higher than 4.63. The last time this happened on March 20th, BBD lost -9.81% on the following trading day.
Although the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 4.68 where further buy stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Banco Bradesco. Out of 204 times, BBD closed higher 52.45% 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 three trading days, showing a win rate of 55.39% with an average market move of 0.20%.