RY finds buyers at key support level
Royal Bank Of Canada (RY) Technical Analysis Report for Jan 09, 2020 | by Techniquant Editorial Team
RY ended Thursday at 79.84 edging lower $0.01 (-0.01%), underperforming the S&P 500 (0.67%). 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 (RY as at Jan 09, 2020):
Thursday's trading range has been $0.39 (0.49%), that's below the last trading month's daily average range of $0.57. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for RY.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
After trading down to 79.70 earlier during the day, Royal Bank bounced off the key technical support level at 79.71 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on December 30, 2019, RY gained 0.27% on the following trading day.
The stock shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might accelerate should prices move above the nearby swing high at 80.22 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 79.22 where further sell stops could get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Royal Bank. Out of 436 times, RY closed higher 56.19% 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 55.50% with an average market move of 0.28%.