Since hitting a new record high at 252.67 in July, the growing weakness has led to a period of correction with price falling as much as -14% over the past two months. Nevertheless, the immediate rebound off the 220.00 support area suggests the uptrend remains intact.
Some early signs of a bullish reversal appeared on 23 September when price broke above the downtrend line (blue highlight). In addition, price also recovered back above the 200 day moving average suggests the bulls are regaining control. Looking closer, the recent retest of the 200 day moving average was met
with some bullish rejection. As a result, a bullish price action, Bullish Engulfing Bar was formed on 6 October signals a high likelihood of a breakout higher (green highlight).
Therefore, expect price to trend higher to test the 250.00 resistance area followed by 269.00. The recent low in September at 216.31 could be the next Higher Low (HL) point for the uptrend.
Our US Research Partner reiterated the Outperform rating on Visa with a target price of $286.00 back in July following solid F3Q results as well as encouraging July trends. Specifically, both revenue ($6.1B vs. Street $5.8B) and adj EPS ($1.49 vs. Street $1.34) handily beat Street expectations thanks to better volume growth (34% fx adj vs. RJe 27%) on the back of the COVID-19 recovery. More importantly, domestic trends in July continued their momentum (total U.S. payments volume 131% of July 2019 levels vs. 130% in 2Q) with international pockets continuing to improve (India, Canada, Brazil). That said, crossborder excl. intra-Europe continues to face challenges, with July slightly below June and F3Q when compared to 2019 levels (81% of 2019 levels in July vs. 82% in F3Q/June) as border reopenings remain in flux. Finally, the implied F4Q revenue guide came in ~200 bp ahead of prior Street expectations. All in, we continue to recommend the stock as we expect forward estimates to continue to grind higher, especially as cross border volumes inevitably return.