DFS closes lower for the 2nd day in a row
Discover Financial Services (DFS) Technical Analysis Report for Jul 16, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DFS finished Tuesday at 80.94 losing $0.09 (-0.11%), but still slightly outperforming the S&P 500 (-0.34%). Trading $0.69 higher after the open, Discover Financial was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 10th, DFS actually gained 0.61% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DFS as at Jul 16, 2019):
Tuesday's trading range has been $1.10 (1.35%), that's slightly below the last trading month's daily average range of $1.13. 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.
Prices are trading close to the key technical support level at 80.62 (S1).
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling could accelerate should prices move below the nearby swing low at 80.36 where further sell stops might get triggered. With prices trading close to this year's high at 82.51, upside momentum could speed up should the stock be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Discover Financial. Out of 468 times, DFS closed higher 60.04% 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 56.84% with an average market move of 0.99%.