Visa Currently Holding Significant Prior High As Support
Anthony Speciale here with Hawkeye Traders. I hope you’re having a wonderful day.
Today, we’re going to take a deep dive into Visa (V) and analyze its recent price action.
This is particularly relevant for those of you trading stocks or options, as understanding the nuances of volume and price action can significantly impact your trading decisions.
A Close Look at Recent Price Action
We’re looking at Visa on a daily chart on the NYSE, where we’ve observed a recent surge in buying volume with a concerning lack of follow-through.
This raises the question: is Visa poised for a deeper correction, or could we be seeing the start of a new trend? Let’s explore this further.
When we zoom out to get a broader picture, we see that Visa put in a low back in October 2022 and has rallied since then, breaking above its significant prior high.
However, this is where things get interesting. Visa is now sitting on that previous high, a key area that could dictate its next move.
Understanding Volume and Price Action
On a weekly chart, we can see that Visa has had periods of significant buying volume followed by immediate failures, as well as surges in selling that led to consolidation and lower pushes.
But the daily chart provides even more clarity.
The candle from Tuesday, August 6th, is particularly noteworthy.
Despite the surge in buying volume, the price did not manage to do anything significantly productive.
In fact, the price closed within the lower 50% of the overall candle, which is a sign of weakness rather than strength.
This pattern suggests a potential downward trend.
We’ve seen lower lows and lower highs forming, and the price action is showing signs of a bearish continuation.
This is a concerning signal for those who are long on Visa, as it could indicate that the recent buying was merely a short-lived attempt to exit positions rather than a genuine bullish push.
Key Levels to Watch
We’re currently observing a fairly firm downward trend line on the daily chart.
Visa has touched this trend line a few times, and it seems to be holding as a significant area of resistance.
If Visa continues to struggle at these levels, it could lead to further downside.
In the event of a breakdown, we could see Visa dropping back to test significant prior highs and lows, with a triple bottom just below $228 being a key area of interest.
If the buying volume we’ve seen recently fails to push the price higher, it might simply be short-covering rather than the start of a new uptrend.
What This Means for Traders
For stock and options traders, understanding the relationship between volume and price action is crucial.
It’s not just about what the price is doing, but why it’s doing it.
The lack of follow-through on significant buying volume is a red flag that suggests potential downside risks.
This analysis isn’t just for Visa; it applies across all asset classes and time frames.
The relationship between volume and price action is a universal concept that every trader should understand.
Join Me for a Deeper Dive
If you find this analysis valuable and want to learn more about how to use volume and price action in your trading, I’d like to invite you to a special training webinar.
In this webinar, we’ll dive deeper into these concepts, explore multiple asset classes, and look at how you can apply this knowledge to your own trading strategy.
After the webinar, I’ll also help you get our Hawkeye indicators set up on your charting platform, whether you’re using TradeStation, TradingView, NinjaTrader, or MetaTrader.
Additionally, you’ll gain access to our Hawkeye Volume Mastery Series, where you can continue your education at your own pace.
Understanding the market’s intention through volume and price action is a game-changer.
Let’s get you dialed in and remove the clutter from your charts so you can focus on what really matters.
Click the link below to join the training webinar. I look forward to seeing you there!
Join the Webinar
Don’t miss this opportunity to deepen your understanding of the market and improve your trading skills. Join me in the training webinar by clicking the link below.
I look forward to seeing you there and helping you take your trading to the next level!
Happy Trading,
Anthony Speciale
Hawkeye Traders
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