WDR finds buyers around 10.96 for the forth day in a row
Waddell & Reed Financial Inc. (WDR) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
WDR finished Thursday at 11.79 gaining $0.50 (4.43%), significantly underperforming the S&P 500 (6.24%). Trading up to $0.54 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (WDR as at Mar 26, 2020):
Thursday's trading range has been $0.87 (7.57%), that's slightly below the last trading month's daily average range of $1.09. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for WDR. Prices continued to consolidate within a tight trading range between 10.96 and 12.16 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern. The last time a Bullish Hikkake Pattern showed up on March 20th, WDR actually lost -5.33% on the following trading day.
After trading down to 10.96 earlier during the day, Waddell & Reed bounced off the key technical support level at 10.96 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 12.27 (R1). The stock was bought again around 10.96 after having seen lows at 11.16, 11.08 and 10.96 in the last three trading sessions. Obviously there is something going on at that level.
Though the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might speed up should prices move below the close-by swing low at 10.96 where further sell stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Its common bullish interpretation has been confirmed for Waddell & Reed. Out of 8 times, WDR closed higher 75.00% 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 62.50% with an average market move of 1.25%.