Visa and Mastercard have been on a wild intraday ride today. MA reported stronger than expected results this morning, and both stocks gapped higher on the open. While traders were fading the strength after the open, the real fireworks started around 11:30 am when both stocks started falling due to the U.S. District Court’s rejection of the Fed’s ruling in 2011 about debit card fee caps (retailers had sued, claiming that the fees were too high). Interestingly, the ruling actually came out before the open, but the market didn’t digest it until near noon.
Regardless of the news, the incredible charts of V and MA show how strong their long-term trends have been. Neither stock has broken its 200 day moving average in more than 2 years, an incredible run for both these names. Here is V with its 50 day (pink), 100 day (green), and 200 day (black) moving averages on the 3 year chart:
Today was the first time V breached its 100 day moving average (at 176.25) in more than a year, though the stock has since recovered. V has hardly traded below its 50 day moving average in 2013 (currently at 184.30).
V has been trading above its 200 day moving average for almost 2 years now (currently at 163.70), and has not even come close to testing it in that period.
MA is a similar chart, though its slope of ascent has been more consistent:
MA hasn’t touched its 200 day moving average since January 2011, an incredible 2.5 years of steady uptrend. There is no indication that today’s selling is the start of something bigger. I just wanted to point out the amazing consistency in the uptrends of these two card behemoths.