DFS pushes through key technical resistance level
Discover Financial Services (DFS) Technical Analysis Report for Jul 12, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DFS finished the week 1.36% higher at 81.29 after gaining $0.70 (0.87%) today, slightly outperforming the S&P 500 (0.46%). Today's close at 81.29 marks the highest recorded closing price since May 6th. Closing above Thursday's high at 81.16, the stock confirmed its breakout through the prior session high after trading up to $0.31 above it intraday.
Daily Candlestick Chart (DFS as at Jul 12, 2019):
Friday's trading range has been $0.95 (1.18%), that's slightly below the last trading month's daily average range of $1.12. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DFS.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern. The last time a White Candle showed up on Tuesday, DFS actually lost -0.52% on the following trading day.
Buyers managed to take out the key technical resistance level at 80.71 (now S1), which is likely to act as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 81.77 where further buy stops might get activated. With prices trading close to this year's high at 82.51, upside momentum could speed up should the share be able to break out to new highs for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Discover Financial. Out of 796 times, DFS closed higher 51.51% 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 59.17% with an average market move of 0.78%.