Visa's performance is rarely below standard! Is the market in an abnormal state? (July 24, 2024)

Hello everyone, in this week's technical analysis, let's analyze Visa, the world's largest payment processing institution.($Visa(V.US)$) In 2024, on July 24th, Visa's stock price plummeted 4% at the close, marking the largest single-day decline in more than two years. Prior to this, the largest issuing institution in the world released its financial report for the third quarter (ending June 30th), which showed a slowdown in the growth of payment transaction volume being processed. Data shows that Visa's third-quarter revenue increased by 9.57% to $8.9 billion, slightly less than Wall Street's expected $8.92 billion. This is the first time since 2020 that Visa's revenue failed to meet Wall Street's expectations and is relatively rare, despite being only slightly different from expectations. In the Asia-Pacific market, the slowdown in payment growth is mainly due to the slow recovery of travel demand in mainland China. In the U.S. market, the lower-income group's consumer budget is tight due to maintaining the highest level since the 2008 financial crisis. Visa expects that revenue growth in the fourth quarter (ending September 30th) will be just over 10% (compared to 10.6% in the same period last year), and will maintain the previously estimated annual revenue and net income growth targets unchanged. As a well-known and stable stock, Visa's stock price has outperformed the market on an annual basis. Since 2009, Visa's stock price has only lagged behind the S&P 500 index for 3 years. However, this year, Visa's stock price has fallen slightly by 2%, while the S&P 500 index has risen by 14%. So the question is: Will Visa's stock price catch up in the second half of the year or will it once again perform anomalously? The daily chart shows that Visa's stock price started an upward trend at the end of October 2023, with an increase of 27% within 5 months. Starting from the end of March this year, the stock price entered a correction trend and the overall trend was in a downward channel. Through the Fibonacci retracement line (golden ratio line), it can be seen that the stock price has retraced by more than 50% and is close to the critical point of 61.8%. ● Visa's stock price has now fallen below the major moving averages, including the 50-day moving average (MA50) and the 200-day moving average (MA200), indicating a bearish trend in the market. ● Accompanied by a 4% drop in the stock price on July 24th, the downward channel on the daily chart has been broken, and trading volume has also shown a significant increase, indicating a strong bearish sentiment in the market. ● Although the RSI and KDJ indicators have once shown a bullish divergence signal, they have quickly fallen back below the 50-point boundary, suggesting that the bearish sentiment may continue. From a short-term perspective, after the downward channel on the daily chart was broken, Visa's stock price is clearly in a bearish sentiment. Investors can closely monitor the potential support near the 61.8% Fibonacci retracement line. If the stock price can hold this critical level, it may end the correction and rebound upward; but once it falls below, a new downward trend may emerge.$Visa (V.US)$Although investors can dig out high-quality individual stocks by themselves, investing only in one stock may be very risky. It is best to achieve risk diversification by covering enough small-cap stocks and enough industries.

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Hot events

On July 24th, 2024, Visa's stock price plummeted 4% at the close, marking the largest single-day decline in more than two years. Prior to this, the largest issuing institution in the world released its financial report for the third quarter (ending June 30th), which showed a slowdown in the growth of payment transaction volume being processed.

Data shows that Visa's third-quarter revenue increased by 9.57% to $8.9 billion, slightly less than Wall Street's expected $8.92 billion. This is the first time since 2020 that Visa's revenue failed to meet Wall Street's expectations and is relatively rare, despite being only slightly different from expectations.

In the Asia-Pacific market, the slowdown in payment growth is mainly due to the slow recovery of travel demand in mainland China. In the U.S. market, the lower-income group's consumer budget is tight due to maintaining the highest level since the 2008 financial crisis.

Visa expects that revenue growth in the fourth quarter (ending September 30th) will be just over 10% (compared to 10.6% in the same period last year), and will maintain the previously estimated annual revenue and net income growth targets unchanged.

As a well-known and stable stock, Visa's stock price has outperformed the market on an annual basis. Since 2009, Visa's stock price has only lagged behind the S&P 500 index for 3 years. However, this year, Visa's stock price has fallen slightly by 2%, while the S&P 500 index has risen by 14%. So the question is: Will Visa's stock price catch up in the second half of the year or will it once again perform anomalously?

Technical analysis

Trend analysis:

The daily chart shows that Visa's stock price started an upward trend at the end of October 2023, with an increase of 27% within 5 months. Starting from the end of March this year, the stock price entered a correction trend and the overall trend was in a downward channel. Through the Fibonacci retracement line (golden ratio line), it can be seen that the stock price has retraced by more than 50% and is close to the critical point of 61.8%.

Indicator interpretation:

Visa's stock price has now fallen below the major moving averages, including the 50-day moving average (MA50) and the 200-day moving average (MA200), indicating a bearish trend in the market.

Accompanied by a 4% drop in the stock price on July 24th, the downward channel on the daily chart has been broken, and trading volume has also shown a significant increase, indicating a strong bearish sentiment in the market.

Although the RSI and KDJ indicators have once shown a bullish divergence signal, they have quickly fallen back below the 50-point boundary, suggesting that the bearish sentiment may continue.

Focus direction:

From a short-term perspective, after the downward channel on the daily chart was broken, Visa's stock price is clearly in a bearish sentiment.

Investors can closely monitor the potential support near the 61.8% Fibonacci retracement line. If the stock price can hold this critical level, it may end the correction and rebound upward; but once it falls below, a new downward trend may emerge.

This content discusses technical analysis. Other methods, including fundamental analysis, may provide different perspectives. The examples provided are for illustrative purposes only and do not reflect expected results.

All investment involves risk, including the potential loss of principal, and no investment strategy can guarantee success.