SCHW closes above its opening price after recovering from early selling pressure
Charles Schwab Corporation (SCHW) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, SCHW finished the week -0.17% lower at 47.23 after edging lower $0.06 (-0.13%) today, slightly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $0.44 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. 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 (SCHW as at Feb 14, 2020):
Friday's trading range has been $0.63 (1.34%), that's far below the last trading month's daily average range of $1.03. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SCHW.
One bullish candlestick pattern matches today's price action, the Takuri Line. The last time a Takuri Line showed up on September 30, 2019, SCHW actually lost -9.73% on the following trading day.
Prices are trading close to the key technical support level at 46.59 (S1).
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might speed up should prices move below the nearby swing low at 46.49 where further sell stops could get activated. With prices trading close to this year's high at 49.26, upside momentum might accelerate should the share be able to break out to new highs for the year. With prices trading close to this year's low at 45.39, downside momentum could speed up should Charles Schwab break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Charles Schwab. Out of 306 times, SCHW closed higher 58.50% 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 53.59% with an average market move of 0.29%.