RY closes below its opening price unable to hold early session gains
Royal Bank Of Canada (RY) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 5th day in a row, RY finished the week 1.31% higher at 81.71 after gaining $0.10 (0.12%) today, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Today's close at 81.71 marks the highest recorded closing price since January 23rd. Trading $0.27 higher after the open, Royal Bank was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (RY as at Feb 14, 2020):
Friday's trading range has been $0.53 (0.65%), that's slightly below the last trading month's daily average range of $0.60. 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 RY.
Five candlestick patterns are matching today's price action, the Bearish Doji Star and the Northern Doji which are both known as bearish patterns and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man. The last time a Rickshaw-Man showed up on November 16, 2018, RY lost -0.73% on the following trading day.
After trading down to 81.46 earlier during the day, the stock bounced off the key technical support level at 81.55 (S1). The failure to close below the support might increase that levels importance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 81.13 where further sell stops might get activated. With prices trading close to this year's high at 82.08, upside momentum could accelerate should the share be able to break out to new highs for the year.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Royal Bank. Out of 56 times, RY closed higher 62.50% 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 66.07% with an average market move of 1.04%.