RY breaks below key technical support level
Royal Bank Of Canada (RY) Technical Analysis Report for Jan 22, 2020 | by Techniquant Editorial Team
RY finished Wednesday at 81.27 losing $0.40 (-0.49%), underperforming the S&P 500 (0.03%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 81.59, the share confirmed its breakout through the prior session low after trading up to $0.37 below it intraday.
Daily Candlestick Chart (RY as at Jan 22, 2020):
Wednesday's trading range has been $0.68 (0.83%), that's above the last trading month's daily average range of $0.53. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for RY.
Two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
Prices broke below the key technical support level at 81.55 (now R1), which is likely to act as resistance going forward.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 79.91. The last time this happened on September 16, 2019, RY actually gained 0.57% on the following trading day.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. Its common bearish interpretation has been confirmed for Royal Bank. Out of 15 times, RY closed lower 73.33% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 46.67% with an average market move of -0.59%.