M closes below its opening price unable to hold early session gains
Macy's Inc (M) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, M ended the week 1.65% higher at 16.67 after losing $0.07 (-0.42%) today on low volume, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading $0.19 higher after the open, the market 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 in a lackluster session.
Daily Candlestick Chart (M as at Feb 14, 2020):
Friday's trading range has been $0.29 (1.74%), that's far below the last trading month's daily average range of $0.51. 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 M.
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. The last time a Shooting Star showed up on November 14, 2019, M actually gained 3.76% on the following trading day.
Prices are trading close to the key technical support level at 16.42 (S1). Prices are trading close to the key technical resistance level at 17.01 (R1). After having been unable to move above 16.92 in the previous session, the stock ran into sellers again around the same price level today, missing to move higher than 16.89.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 17.09 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 16.13 where further sell stops could get activated. With prices trading close to this year's low at 15.78, downside momentum might accelerate should Macy's break out to new lows for the year. As prices are trading close to February's low at 15.89, downside momentum could speed up should the share mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Macy's. Out of 304 times, M closed higher 52.30% 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 56.58% with an average market move of 0.28%.