V breaks above 20-day moving average for the first time since February 21st
Visa Inc. (V) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, V ended Thursday at 168.88 gaining $7.10 (4.39%), strongly underperforming the Dow Indu. (6.38%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 168.18, the stock confirmed its breakout through the previous session high after trading up to $1.35 above it intraday.
Daily Candlestick Chart (V as at Mar 26, 2020):
Thursday's trading range has been $7.73 (4.77%), that's far below the last trading month's daily average range of $11.15. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for V.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Visa managed to close above the 20-day moving average at 168.32 for the first time since February 21st. Prices are trading close to the key technical resistance level at 172.98 (R1). After having been unable to move above 168.18 in the prior session, the share ran into sellers again around the same price level today, failing to move higher than 169.53. The last time this happened on March 20th, V lost -7.55% on the following trading day.
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Visa. Out of 588 times, V closed higher 52.72% 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 61.73% with an average market move of 0.86%.