BK closes lower for the 2nd day in a row
Bank of New York Mellon Corporation (BK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BK ended the month -7.24% lower at 35.85 after edging lower $0.01 (-0.03%) today, underperforming the S&P 500 (0.77%). Trading up to $0.19 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (BK as at Jul 31, 2020):
Friday's trading range has been $0.42 (1.17%), that's far below the last trading month's daily average range of $0.94. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BK. Prices continued to consolidate within a tight trading range between 35.27 and 36.53 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 35.57 earlier during the day, the market bounced off the key technical support level at 35.72 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move lower than 35.45 in the previous session, the stock found buyers again around the same price level today at 35.57. The last time this happened on Wednesday, BK actually lost -1.35% on the following trading day.
Bank of shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 36.53 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 35.45 where further sell stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Bank of. Out of 289 times, BK closed higher 55.02% 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 58.13% with an average market move of 0.37%.