DLR closes below its opening price unable to hold early session gains
Digital Realty Trust Inc. (DLR) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DLR finished Monday at 142.44 losing $1.12 (-0.78%), strongly underperforming the S&P 500 (0.38%). Trading $0.99 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. 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 (DLR as at Jun 01, 2020):
Monday's trading range has been $2.57 (1.79%), that's below the last trading month's daily average range of $4.75. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DLR.
In spite of a strong opening Digital Realty closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, three candlestick patterns are matching today's price action, the Bearish Hikkake Pattern, the Bearish Short Candle and the Black Candle which are known as bearish patterns.
Prices are trading close to the key technical support level at 139.75 (S1). After having been unable to move above 144.66 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 144.94. The last time this happened on May 27th, DLR actually gained 4.83% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 146.21 where further buy stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Digital Realty. Out of 58 times, DLR closed higher 58.62% 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 62.07% with an average market move of 0.77%.