DISCA soars, gaining $0.74 (2.39%) within a single day on low volume
Discovery Communications-A (DISCA) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
DISCA finished the week -3.55% lower at 31.76 after surging $0.74 (2.39%) today on low volume, slightly underperforming the Nasdaq 100 (2.77%). This is the biggest single-day gain in over four weeks. The last time we've seen such an unusually strong single-day gain on September 12th, DISCA gained 3.71% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (DISCA as at Oct 12, 2018):
Friday's trading range has been $0.71 (2.26%), that's slightly below the last trading month's daily average range of $0.80. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for DISCA.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving lower in the prior session, the share managed to close higher but below the previous day's open, forming a bullish Harami Candle.
Prices are trading close to the key technical resistance level at 32.52 (R1). After having been unable to move above 32.09 in the prior session, the stock ran into sellers again around the same price level today, missing to move higher than 32.06.
While Discovery is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Up Move" stand out. Its common bullish interpretation has been confirmed for Discovery. Out of 118 times, DISCA closed higher 61.02% 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 56.78% with an average market move of 0.68%.