January 21 Chart of the Day - Discover Financial Services
Precision oriented price action technical analysis by far provides the best edges and most setups for traders and investors across the markets so that's what we use for the basis of our reviews
Discover Financial Services (DFS) is scheduled to release 4Q earnings results on January 22 after market close.
Their stock has been repeatedly making new all time highs (ATHs) 6 of the past 7 months and by request we'll take a deeper dive into the chart from a price action technical analysis perspective.
Makes sense that during a time of rising interest rates that a financial services company share price would go up doesn't it?
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Monthly Chart
On the monthly chart we can see that price established yet another ATH at $190.13 on Tuesday.
We intentionally haven't marked up this chart because you may have the same questions that we received about it:
- How much higher can price go?
- If I own the stock where should I get out?
- If I don't own the stock but would like to get in what level should I look for?
- Should I just ignore this chart and come back in a few months and take another look?
We'll attempt to provide responses to these on the weekly chart.
Weekly Chart
On the weekly chart we can see with much more clarity the continued buying by the bulls especially since breaking above, retesting, and continuing up from its $135.69 previous ATH last summer.
Since then price has been going through what we call a "discovery phase" carving out new price action structure at levels never reached before.
But that doesn't mean we can't anticipate pull back levels or determine potential upside targets using Fibonacci and Trend as covered in depth for Free in our "Trading All Time Highs" Market Insights Briefing.
Closing at $189.26 today price may use this week's earnings as a catalyst to either continue upwards or decide to take a breather and possibly pull back.
It goes without saying though, the only guarantee in the markets is that price cycles. It cycles up and it cycles down across all time frames and all charts and rarely, if ever, moves in a straight line.
Pullback and upside anticipated price levels are marked on the chart. But ultimately price can go as high as it wants keeping in mind that the Fibonacci extensions only represent potential upside price targets.
Only time will tell for sure what price will do next...
We've layered in traditional Fibonacci levels as well as support/resistance and trend to help identify potential price levels of interest and/or future price targets.
Armed with precision oriented charts like these both traders and investors can formulate their respective plans.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
ChartPros provides the exact methodology in its price action technical analysis courses to create charts like this with the most precise and accurate levels from which investors and traders can formulate their respective trade plans.
Take a look at the charts and let us know what you think. We'd like to hear from you in the comments sections.
