MAA breaks below 20-day moving average for the first time since March 1st
Mid-America Apartment Communities Inc. (MAA) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, MAA finished Tuesday at 106.58 tanking $3.35 (-3.05%), strongly underperforming the S&P 500 (0.05%). This is the biggest single-day loss in over three months. Today's close at 106.58 marks the lowest recorded closing price since March 20th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 109.48, the market confirmed its breakout through the previous session low after trading up to $3.18 below it intraday.
Daily Candlestick Chart (MAA as at Apr 16, 2019):
Tuesday's trading range has been $3.70 (3.37%), that's far above the last trading month's daily average range of $1.47. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MAA.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 106.30 during the day, Mid-America Apartment found support at the 50-day moving average at 106.41. The share closed below the 20-day moving average at 109.08 for the first time since March 1st.
Crossing below the lower Bollinger Band for the first time since December 24, 2018, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 109.08 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on December 24, 2018, MAA actually gained 3.29% on the following trading day.
Though the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Mid-America Apartment. Out of 130 times, MAA closed higher 55.38% 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 61.54% with an average market move of 0.70%.