DISCA finds buyers again around 20.73
Discovery Inc. Series A Common Stock (DISCA) Technical Analysis Report for Jul 06, 2020 | by Techniquant Editorial Team
DISCA finished Monday at 21.24 gaining $0.45 (2.16%), outperforming the S&P 500 (1.59%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DISCA as at Jul 06, 2020):
Monday's trading range has been $0.63 (2.96%), that's far below the last trading month's daily average range of $1.13. 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. Prices continued to consolidate within a tight trading range between 20.70 and 21.80 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, four candlestick patterns are matching today's price action, the Bullish Harami Cross Pattern, the Homing Pigeon and the Takuri Line which are known as bullish patterns and one neutral pattern, the Doji.
After trading down to 20.73 earlier during the day, the share bounced off the key technical support level at 20.92 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on July 2nd, DISCA gained 2.16% on the following trading day. After having been unable to move lower than 20.70 in the previous session, Discovery found buyers again around the same price level today at 20.73.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the close-by swing high at 21.80 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 20.70 where further sell stops might get triggered. Further selling could move prices lower should the market test June's close-by low at 19.95.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Takuri Line" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Discovery. Out of 75 times, DISCA closed lower 61.33% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 50.67% with an average market move of -0.17%.