V stuck within tight trading range
Visa Inc. (V) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
V finished Wednesday at 205.13 edging lower $0.26 (-0.13%), slightly underperforming the Dow Indu. (0.13%). Trading $1.00 higher after the open, the market was unable to hold its gains as the bears took control ending the day below 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 (V as at Sep 16, 2020):
Wednesday's trading range has been $2.79 (1.35%), that's below the last trading month's daily average range of $4.12. 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 V. Prices continued to consolidate within a tight trading range between 203.14 and 208.21 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 202.89 (S1). Prices are trading close to the key technical resistance level at 208.21 (R1). After having been unable to move lower than 204.77 in the prior session, Visa found buyers again around the same price level today at 204.95. The last time this happened on September 1st, V gained 1.47% on the following trading day.
Although the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the close-by swing high at 208.21 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Visa. Out of 467 times, V closed higher 64.24% 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 67.02% with an average market move of 1.56%.