BMO runs into sellers again around 51.86
Bank Of Montreal (BMO) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, BMO finished Thursday at 49.81 gaining $1.57 (3.25%), strongly underperforming the S&P 500 (6.24%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (BMO as at Mar 26, 2020):
Thursday's trading range has been $3.13 (6.34%), that's slightly below the last trading month's daily average range of $3.57. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for BMO.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Shooting Star.
Unable to break through the key technical resistance level at 51.14 (R1), the market closed below it after spiking up to 51.86 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on Monday, BMO actually gained 14.60% on the following trading day. After having been unable to move above 51.35 in the prior session, the share ran into sellers again around the same price level today, missing to move higher than 51.86.
Though the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Shooting Star" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Bank Of. Out of 48 times, BMO closed higher 58.33% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 62.50% with an average market move of 0.35%.