DXC finds buyers at key support level
DXC Technology Company (DXC) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
DXC finished the week -4.09% lower at 15.49 after gaining $0.33 (2.18%) today, strongly outperforming the S&P 500 (1.05%). Closing above Thursday's high at 15.37, the stock confirmed its breakout through the prior session high after trading up to $0.19 above it intraday.
Daily Candlestick Chart (DXC as at Jul 10, 2020):
Friday's trading range has been $0.63 (4.18%), that's below the last trading month's daily average range of $0.95. 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 DXC. Prices continued to consolidate within a tight trading range between 14.73 and 15.56 where it has been caught now for the last three trading days.
Despite a weak opening the share managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on June 25th, DXC actually lost -2.70% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
After trading down to 14.93 earlier during the day, DXC Technology bounced off the key technical support level at 14.95 (S1). The failure to close below the support might increase that levels significance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 14.73 where further sell stops might get triggered. Trading close to May's low at 13.65 we could see further downside momentum if potential sell stops at the level get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for DXC Technology. Out of 67 times, DXC closed lower 56.72% of the time on the next trading day after the market condition occurred.