VIV pushes through Thursday's high
Telefonica Brasil S.A. ADS (VIV) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, VIV finished the month 13.88% higher at 10.09 after gaining $0.16 (1.61%) today on high volume, outperforming the S&P 500 (0.77%). Closing above Thursday's high at 9.95, Telefonica Brasil confirmed its breakout through the previous session high after trading up to $0.26 above it intraday.
Daily Candlestick Chart (VIV as at Jul 31, 2020):
Friday's trading range has been $0.57 (5.8%), that's far above the last trading month's daily average range of $0.27. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for VIV.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar.
After trading down to 9.64 earlier during the day, the stock bounced off the key technical support level at 9.66 (S2). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on July 26, 2017, VIV gained 1.78% on the following trading day. The share was bought again around 9.64 after having seen lows at 9.70, 9.65 and 9.66 in the last three trading sessions. Obviously there is something going on at that level.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Further buying might move prices higher should the market test June's close-by high at 10.31.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S2" stand out. Its common bullish interpretation has been confirmed for Telefonica Brasil. Out of 11 times, VIV closed higher 72.73% 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 63.64% with an average market move of 2.63%.