DFS runs into sellers again around 75.77
Discover Financial Services (DFS) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
DFS finished the week -2.97% lower at 74.54 after gaining $0.36 (0.49%) today, underperforming the S&P 500 (1.42%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (DFS as at Oct 12, 2018):
Friday's trading range has been $2.42 (3.21%), that's far above the last trading month's daily average range of $1.25. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for DFS.
After trading down to 73.35 earlier during the day, the market bounced off the key technical support level at 73.55 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move above 75.98 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 75.77. The last time this happened on Wednesday, DFS lost -1.77% on the following trading day.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 77.34.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
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 Discover Financial. Out of 471 times, DFS closed higher 59.24% 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 61.36% with an average market move of 1.78%.