RY finds buyers at key support level
Royal Bank Of Canada (RY) Technical Analysis Report for Jan 10, 2020 | by Techniquant Editorial Team
RY finished the week 0.54% higher at 79.85 after edging higher $0.01 (0.01%) today, slightly outperforming the S&P 500 (-0.29%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (RY as at Jan 10, 2020):
Friday's trading range has been $0.52 (0.65%), that's slightly 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.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on December 30, 2019, RY actually gained 0.27% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 79.62 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 importance as support going forward. After having been unable to move lower than 79.70 in the prior session, the stock found buyers again around the same price level today at 79.62.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might speed up should prices move above the close-by swing high at 80.22 where further buy stops could get activated.
Among the six 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 437 times, RY closed higher 56.29% 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 55.38% with an average market move of 0.28%.