M closes below its opening price unable to hold early session gains
Macy's Inc (M) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
M finished Thursday at 5.94 losing $0.67 (-10.14%) on high volume, significantly underperforming the S&P 500 (6.24%). Trading $0.52 higher after the open, Macy's was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (M as at Mar 26, 2020):
Thursday's trading range has been $1.24 (18.79%), that's above the last trading month's daily average range of $1.01. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for M.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Monday, M actually gained 17.67% on the following trading day.
Prices are trading close to the key technical support level at 5.56 (S1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(14) below 30" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Macy's. Out of 36 times, M closed lower 63.89% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 58.33% with an average market move of -2.50%.