USB finds buyers at key support level
U.S. Bancorp (USB) Technical Analysis Report for Sep 21, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, USB finished Monday at 36.16 tanking $1.46 (-3.88%), significantly underperforming the S&P 500 (-1.16%).
Daily Candlestick Chart (USB as at Sep 21, 2020):
Monday's trading range has been $1.56 (4.25%), that's far above the last trading month's daily average range of $1.10. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for USB.
After trading down to 35.62 earlier during the day, the share bounced off the key technical support level at 36.00 (S1). The failure to close below the support might increase that levels significance as support going forward. The market closed back below the 100-day moving average at 36.50 for the first time since September 10th. When this moving average was crossed below the last time on September 10th, USB actually gained 2.52% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Further selling could move prices lower should the market test August's close-by low at 35.03.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Gap Down" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for U. S. Bancorp. Out of 102 times, USB closed higher 57.84% 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 61.76% with an average market move of 0.34%.