DISCA rockets, gaining $0.98 (5.09%) within a single day
Discovery Inc. Series A Common Stock (DISCA) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
DISCA finished the week -2.69% lower at 20.23 after surging $0.98 (5.09%) today, strongly outperforming the S&P 500 (1.05%). This is the biggest single-day gain in over a month. The bulls were in full control today, moving the market higher throughout the whole session. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (DISCA as at Jul 10, 2020):
Friday's trading range has been $1.16 (6.03%), that's slightly above the last trading month's daily average range of $1.04. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for DISCA.
Even with a weak opening the stock managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical resistance level at 20.71 (R1). After having been unable to move lower than 19.11 in the prior session, Discovery found buyers again around the same price level today at 19.21.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 21.33. The last time this happened on March 23rd, DISCA gained 8.33% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 19.11 where further sell stops might get triggered. Trading close to May's low at 18.56 we could see further downside momentum if potential sell stops at the level get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Up Move" stand out. Its common bullish interpretation has been confirmed for Discovery. Out of 104 times, DISCA closed higher 60.58% 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 56.73% with an average market move of 0.32%.