CPA finds buyers at key support level
Copa Holdings S.A. Class A (CPA) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
CPA finished the week 12.38% higher at 46.57 after losing $0.84 (-1.77%) today, notably underperforming the S&P 500 (0.06%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CPA as at Aug 07, 2020):
Friday's trading range has been $1.88 (4.02%), that's slightly below the last trading month's daily average range of $2.23. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CPA.
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. After moving higher in the prior session, Copa Holdings closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 45.36 earlier during the day, the stock bounced off the key technical support level at 45.88 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on Wednesday, CPA gained 9.14% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 48.37 where further buy stops might get activated.
Among the four 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 Copa Holdings. Out of 434 times, CPA closed higher 56.68% 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 60.60% with an average market move of 1.20%.