DISCA breaks below Wednesday's low
Discovery Inc. Series A Common Stock (DISCA) Technical Analysis Report for Jul 02, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DISCA finished Thursday at 20.79 losing $0.28 (-1.33%), strongly underperforming the S&P 500 (0.45%) ahead of tomorrow's Independence Day OBS market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 20.97, Discovery confirmed its breakout through the previous session low after trading up to $0.27 below it intraday.
Daily Candlestick Chart (DISCA as at Jul 02, 2020):
Thursday's trading range has been $1.05 (4.88%), that's slightly below the last trading month's daily average range of $1.16. 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 DISCA.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on June 26th, DISCA actually gained 4.79% on the following trading day.
After trading down to 20.70 earlier during the day, the market bounced off the key technical support level at 20.71 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move above 21.80 in the prior session, the share ran into sellers again around the same price level today, missing to move higher than 21.75.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the nearby swing high at 21.80 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 19.95 where further sell stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Discovery. Out of 61 times, DISCA closed lower 57.38% of the time on the next trading day after the market condition occurred.