VZ finds buyers at key support level
Verizon Communications Inc. (VZ) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
VZ ended the month 4.26% higher at 57.48 after gaining $0.18 (0.31%) today, slightly underperforming the Dow Indu. (0.44%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 57.46, Verizon Communications confirmed its breakout through the prior session high after trading up to $0.03 above it intraday.
Daily Candlestick Chart (VZ as at Jul 31, 2020):
Friday's trading range has been $0.84 (1.48%), that's slightly above the last trading month's daily average range of $0.75. 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 lower than usual for VZ. Prices continued to consolidate within a tight trading range between 56.51 and 57.70 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
After trading down to 56.65 earlier during the day, the stock bounced off the key technical support level at 56.83 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on Monday, VZ gained 1.07% on the following trading day. Prices are trading close to the key technical resistance level at 57.57 (R1). After having been unable to move above 57.46 in the previous session, the share ran into sellers again around the same price level today, missing to move higher than 57.49.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 57.70 where further buy stops could get activated. Further buying might move prices higher should the market test June's nearby high at 58.23.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Outside Bar" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Verizon Communications. Out of 98 times, VZ closed lower 56.12% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 56.12% with an average market move of -0.26%.