CMA finds buyers at key support level
Comerica Incorporated (CMA) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
CMA ended the month 1.1% higher at 38.52 after gaining $0.27 (0.71%) today on high volume, slightly underperforming the S&P 500 (0.77%). Trading up to $1.27 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 38.46, Comerica Incorporated confirmed its breakout through the prior session high after trading up to $0.15 above it intraday.
Daily Candlestick Chart (CMA as at Jul 31, 2020):
Friday's trading range has been $1.87 (4.92%), that's above the last trading month's daily average range of $1.58. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CMA. Prices continued to consolidate within a tight trading range between 36.12 and 38.88 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern.
After trading down to 36.74 earlier during the day, the market bounced off the key technical support level at 37.01 (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 36.63 in the previous session, the stock found buyers again around the same price level today at 36.74. The last time this happened on Wednesday, CMA actually lost -1.47% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the nearby swing high at 38.88 where further buy stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Comerica Incorporated. Out of 130 times, CMA closed higher 61.54% 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 55.38% with an average market move of 0.73%.