DISCA closes higher for the 2nd day in a row
Discovery Inc. Series A Common Stock (DISCA) Technical Analysis Report for Aug 11, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DISCA finished Tuesday at 22.48 gaining $0.70 (3.21%) on high volume, notably outperforming the S&P 500 (-0.8%). Today's close at 22.48 marks the highest recorded closing price since June 18th. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (DISCA as at Aug 11, 2020):
Tuesday's trading range has been $1.72 (7.83%), that's far above the last trading month's daily average range of $0.85. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DISCA.
One bearish candlestick pattern matches today's price action, the Bearish Hikkake Pattern.
Prices are trading close to the key technical support level at 21.91 (S1). Unable to break through the key technical resistance level at 23.00 (R1), the share closed below it after spiking up to 23.67 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
Crossing above the upper Bollinger Band for the first time since June 8th, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 21.34 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on June 5th, DISCA gained 5.53% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Hikkake Pattern" stand out. Its common bearish interpretation has been confirmed for Discovery. Out of 108 times, DISCA closed lower 55.56% 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 51.85% with an average market move of -0.96%.