Visa may have formed a major top

Watch the 168.60 downside trigger level on Visa.

Medium-term technical outlook on Visa (V)



click to enlarge charts

Key Levels (1 to 3 weeks)

Intermediate resistance: 182.40

Pivot (key resistance): 187.05

Supports: 168.60 & 151.10/145.50

Next resistance: 198.60/200.90

Directional Bias (1 to 3 weeks)

A potential major 3-month toppish configuration in place since 29 Jul 2019, bearish bias below 187.05 pivotal resistance and a break below 168.60 is likely to reinforce the start of a potential corrective decline to target the next medium-term support zone at 151.10/145.50.

On the other hand, a clearance with a daily close above 187.05 sees an extension of the impulsive upleg sequence towards 198.60/200.90 next (Fibonacci expansion cluster).

Key elements

  • The weekly RSI oscillator has continued to trace out a bearish divergence signal in place since its all-time high of 187.05 printed in Sep 2019 which indicates a slow- down in upside momentum of the major uptrend from 21 Dec 2018 low.
  • A potential major bearish reversal “Head & Shoulders” configuration has started to take form since 29 Jul 2019 with its neckline support at 168.60.
  • At the close of yesterday, 04 Nov U.S. session, the price action has formed a 2nd “Bearish Engulfing” candlestick pattern where the 1st Bearish Engulfing” has taken shaped at the 187.05 all-time high level. These observations suggest that sentiment has turned negative where a potential downside reversal in price action is imminent. Interestingly, the 2nd Bearish Engulfing candlestick pattern has formed at the “right shoulder” of the potential “Head & Shoulders” configuration with 1st Bearish Engulfing that has coincided with the “head”.
  • Relative strength analysis as seen from the ratio charts of Visa against the market (S&P 500) and its sector (Technology) has indicated on-going underperformance of Visa.
  • Also, Visa is classified as a momentum factor-based stock where it is a significant component stock (4th largest) in the iShares USA Momentum Factor ETF that has underperformed against a basket of value factor-based stocks (iShares S&P 500 Value Factor ETF).

Charts are from eSignal 


Related Articles

Disclaimer: GAIN Capital UK Limited (trading as "Forex.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, Forex.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by Forex.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although Forex.com is not specifically prevented from dealing before providing this material, Forex.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.