DISCA closes within previous day's range after lackluster session
Discovery Inc. Series A Common Stock (DISCA) Technical Analysis Report for Jul 01, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DISCA ended Wednesday at 21.07 edging lower $0.03 (-0.14%), underperforming the S&P 500 (0.5%). Trading $0.57 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DISCA as at Jul 01, 2020):
Wednesday's trading range has been $0.83 (3.91%), that's below the last trading month's daily average range of $1.17. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DISCA.
One bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern.
Prices are trading close to the key technical support level at 20.71 (S1). After spiking up to 21.80 during the day, Discovery found resistance at the 50-day moving average at 21.79. The last time this happened on May 7th, DISCA actually gained 2.73% on the following trading day.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the close-by swing low at 19.95 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 50" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Discovery. Out of 42 times, DISCA closed higher 52.38% 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 59.52% with an average market move of 1.70%.