RY closes below its opening price unable to hold early session gains
Royal Bank Of Canada (RY) Technical Analysis Report for Jan 17, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, RY ended the week 2.09% higher at 81.52 after gaining $0.09 (0.11%) today, slightly underperforming the S&P 500 (0.39%) ahead of tomorrow's Martin Luther King Jr. Day market holiday. Today's close at 81.52 marks the highest recorded closing price since November 29, 2019. Trading $0.16 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on January 7th, RY actually gained 0.60% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (RY as at Jan 17, 2020):
Friday's trading range has been $0.37 (0.45%), that's far below the last trading month's daily average range of $0.53. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for RY.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical resistance level at 81.55 (R1). After having been unable to move above 81.68 in the previous session, Royal Bank ran into sellers again around the same price level today, missing to move higher than 81.73.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day while could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 79.68.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
2019's high at 82.58 is within reach and we could see further upside momentum should the share manage to break out beyond. Further buying might move prices higher should the market test December's close-by high at 81.89.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. Its common bullish interpretation has been confirmed for Royal Bank. Out of 164 times, RY closed higher 56.10% 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 57.32% with an average market move of 0.50%.