ERI enters Death Cross for the first time since December 3, 2019
Eldorado Resorts Inc. (ERI) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, ERI ended Thursday at 16.79 edging higher $0.10 (0.6%), notably underperforming the S&P 500 (6.24%). Trading $2.86 higher after the open, Eldorado Resorts was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (ERI as at Mar 26, 2020):
Thursday's trading range has been $3.81 (22.41%), that's slightly below the last trading month's daily average range of $4.54. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ERI.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns.
Prices are trading close to the key technical support level at 14.66 (S1). After having been unable to move lower than 15.56 in the previous session, the share found buyers again around the same price level today at 16.05. The last time this happened on Monday, ERI gained 44.16% on the following trading day.
Although the stock is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish. With its 50-day moving average crossing below its 200-day moving average, the market has entered a so-called "Death Cross" for the first time since December 3, 2019. Showing increasing downward momentum in the short and medium-term the "Death Cross" is known to indicate a potential bear market on the horizon.
Buying might speed up should prices move above the close-by swing high at 20.27 where further buy stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Shooting Star" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Eldorado Resorts. Out of 38 times, ERI closed higher 65.79% of the time on the next trading day after the market condition occurred.