MAT snaps to lowest close since January 3rd
Mattel Inc. (MAT) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MAT ended the week -0.92% lower at 13.95 after tanking $0.45 (-3.13%) today on high volume, significantly underperforming the S&P 500 (0.18%) following Thursday's earnings report. This is the biggest single-day loss in over a month. Today's close at 13.95 marks the lowest recorded closing price since January 3rd. Closing below Thursday's low at 14.33, the share confirmed its breakout through the prior session low after trading up to $0.73 below it intraday.
Daily Candlestick Chart (MAT as at Feb 14, 2020):
MAT reported earnings of $0.11 per share after Thursday's market close. The company's last earnings report was released on Oct. 29, 2019, when Mattel Inc. reported earnings of $0.26 per share beating market expectations by 225.0%.
Friday's trading range has been $1.10 (7.64%), that's far above the last trading month's daily average range of $0.41. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MAT.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar.
After trading as low as 13.60 during the day, the market found support at the 50-day moving average at 13.74. The stock closed back below the 20-day moving average at 14.35.
Crossing below the lower Bollinger Band for the first time since December 3, 2019, 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 14.35 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 3, 2019, MAT actually gained 4.12% on the following trading day.
Although Mattel is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
With prices trading close to this year's low at 13.07, downside momentum might speed up should MAT break out to new lows for the year.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post Earnings Report" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Mattel. Out of 29 times, MAT closed higher 68.97% 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 51.72% with an average market move of -0.18%.