COF finds buyers at key support level
Capital One Financial Corporation (COF) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, COF finished the week 0.83% higher at 102.64 after edging lower $0.14 (-0.14%) today on low volume, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $0.36 higher after the open, Capital One was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (COF as at Feb 14, 2020):
Friday's trading range has been $1.01 (0.98%), that's far below the last trading month's daily average range of $1.75. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for COF. Prices continued to consolidate within a tight trading range between 102.03 and 103.62 where it has been caught now for the last three trading days.
Notwithstanding a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on January 27th, COF actually gained 0.87% on the following trading day.
After trading down to 102.22 earlier during the day, the share bounced off the key technical support level at 102.47 (S1). The failure to close below the support could increase that levels importance as support going forward. The stock closed back below the 20-day moving average at 102.69. After having been unable to move lower than 102.03 in the previous session, COF found buyers again around the same price level today at 102.22.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 103.74 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 102.03 where further sell stops could get triggered. With prices trading close to this year's low at 99.21, downside momentum might accelerate should Capital One break out to new lows for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Capital One. Out of 397 times, COF closed higher 58.94% 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 55.92% with an average market move of 0.54%.