DISCA closes higher for the 2nd day in a row
Discovery Inc. Series A Common Stock (DISCA) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DISCA finished Tuesday at 22.01 gaining $0.67 (3.14%) on high volume, notably outperforming the S&P 500 (0.36%) ahead of Wednesday's earnings report.
Daily Candlestick Chart (DISCA as at Aug 04, 2020):
DISCA is set to report earnings before tomorrow's market open. For the upcoming report, analysts expect the company to have earned $0.71 per share. The company's last earnings report was released on May 6, 2020, when Discovery Inc. Series A Common Stock reported earnings of $0.87 per share missing market expectations by -2.2%.
Tuesday's trading range has been $1.25 (5.82%), that's far above the last trading month's daily average range of $0.78. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DISCA.
Discovery managed to close above the 50-day moving average at 21.69 for the first time since July 16th. When this moving average was crossed above the last time on July 15th, DISCA gained 1.10% on the following trading day. Unable to break through the key technical resistance level at 22.03 (R1), the market closed below it after spiking up to 22.55 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day before Earnings Report" stand out. While it is usually interpreted as neutral, it has actually shown to be bearish for Discovery. Out of 32 times, DISCA closed lower 71.88% 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 68.75% with an average market move of -1.78%.