Mastercard broke a bearish upward sloping wedge yesterday. After losing the trend line around 158-159, it sold off all the way down to 149 at open today. However after the first few minutes, it ramped up to never look back hitting a price of $163 before taking a pause. Mastercard closed strong at 164.37 close to the high of the day. It formed what is called a bullish engulfing candle, a very strong reversal pattern. Intra-day there was very strong support at 160.50.
Yesterday I had talked about how though the SPX had broken the wedge, it was still in an upward channel. Today the SPX recovered most of its losses from yesterday. Mastercard’s price-action today was a microcosm of the broader market.
This is a treacherous market with big unexpected moves. It is not a market where one should lean stronger on either side. No home runs; certainly no grand slams. Collect your runs single by single.
PS: As I write this, Capital One (COF) reported rising defaults. It is likely that credit card related equities will be under pressure; but nothing is certain.
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