DFS pops to highest close since June 8th
Discover Financial Services (DFS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
DFS finished Wednesday at 59.22 surging $2.17 (3.8%) on high volume, strongly outperforming the S&P 500 (-0.46%). Today's close at 59.22 marks the highest recorded closing price since June 8th. 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 Sep 16, 2020):
Wednesday's trading range has been $3.77 (6.59%), that's far above the last trading month's daily average range of $2.01. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DFS.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Discover Financial managed to close back above the 200-day moving average at 57.29. Unable to break through the key technical resistance level at 59.23 (R1), the share closed below it after spiking up to 60.45 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. After having been unable to move lower than 56.86 in the prior session, the market found buyers again around the same price level today at 56.68. The last time this happened on September 11th, DFS gained 5.94% on the following trading day.
Crossing above the upper Bollinger Band for the first time since Monday, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 54.00 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Outside Bar" stand out. Its common bullish interpretation has been confirmed for Discover Financial. Out of 126 times, DFS closed higher 56.35% 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 61.11% with an average market move of 1.04%.