DISCA closes lower for the 3rd day in a row
Discovery Inc. Series A Common Stock (DISCA) Technical Analysis Report for Jul 09, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DISCA finished Thursday at 19.25 tanking $0.97 (-4.8%) on high volume, strongly underperforming the S&P 500 (-0.56%). Today's close at 19.25 marks the lowest recorded closing price since May 13th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 19.99, the stock confirmed its breakout through the previous session low after trading up to $0.88 below it intraday.
Daily Candlestick Chart (DISCA as at Jul 09, 2020):
Thursday's trading range has been $1.12 (5.54%), that's slightly above the last trading month's daily average range of $1.03. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for DISCA.
One bearish candlestick pattern matches today's price action, the Black Candle.
Crossing below the lower Bollinger Band for the first time since March 20th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 21.44 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on March 20th, DISCA lost -1.44% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 17.12, downside momentum could accelerate should the market break out to new lows for the year. Trading close to May's low at 18.56 we might see further downside momentum if potential sell stops at the level get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Discovery. Out of 74 times, DISCA closed higher 54.05% 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 63.51% with an average market move of 1.21%.