DISCA closes lower for the 2nd day in a row
Discovery Inc. Series A Common Stock (DISCA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DISCA finished the week -0.83% lower at 20.30 after losing $0.37 (-1.79%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 20.61, Discovery confirmed its breakout through the previous session low after trading up to $0.40 below it intraday.
Daily Candlestick Chart (DISCA as at May 22, 2020):
Friday's trading range has been $0.74 (3.57%), that's below the last trading month's daily average range of $1.13. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DISCA.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical resistance level at 20.71 (R1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
As prices are trading close to May's high at 22.11, upside momentum could speed up should the market mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Discovery. Out of 328 times, DISCA closed higher 53.96% 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 53.96% with an average market move of 0.68%.