DFS closes lower for the 2nd day in a row
Discover Financial Services (DFS) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DFS finished the week 6.5% higher at 40.47 after edging lower $0.28 (-0.69%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DFS as at May 22, 2020):
Friday's trading range has been $1.39 (3.41%), that's below the last trading month's daily average range of $2.13. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DFS. Prices continued to consolidate within a tight trading range between 39.35 and 41.56 where it has been caught now for the whole last trading week.
Prices are trading close to the key technical support level at 39.35 (S1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 41.56 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 39.35 where further sell stops might get activated. As prices are trading close to May's high at 43.43, upside momentum could speed up should the market mark new highs for the month.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Discover Financial. Out of 692 times, DFS closed higher 53.76% 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 58.82% with an average market move of 0.87%.