MAT closes below its opening price unable to hold early session gains
Mattel Inc. (MAT) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, MAT finished the month 14.89% higher at 11.11 after losing $0.12 (-1.07%) today, significantly underperforming the S&P 500 (0.77%). Trading $0.15 higher after the open, the share 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 (MAT as at Jul 31, 2020):
Friday's trading range has been $0.44 (3.93%), that's slightly above the last trading month's daily average range of $0.41. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MAT.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on July 24th, MAT lost -4.23% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 10.92 earlier during the day, the stock bounced off the key technical support level at 10.97 (S1). The failure to close below the support could increase that levels importance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 11.50 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 10.70 where further sell stops could get activated.
Among the seven 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 Mattel. Out of 159 times, MAT closed higher 58.49% 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 eight trading days, showing a win rate of 53.46% with an average market move of 0.40%.