MCHP closes below its opening price unable to hold early session gains
Microchip Technology Incorporated (MCHP) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MCHP finished the week -6.7% lower at 83.26 after losing $1.82 (-2.14%) today, notably underperforming the Nasdaq 100 (-1.01%). Today's close at 83.26 marks the lowest recorded closing price since March 29th. Trading $1.66 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (MCHP as at May 17, 2019):
Friday's trading range has been $2.29 (2.74%), that's slightly below the last trading month's daily average range of $2.42. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for MCHP.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
Prices broke below the key technical support level at 83.42 (now R1), which is likely to act as resistance going forward. After having been unable to move above 85.53 in the previous session, Microchip Technology ran into sellers again around the same price level today, missing to move higher than 85.36. The last time this happened on May 10th, MCHP lost -6.31% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Trading close to March's low at 80.03 we might see further downside momentum if potential sell stops at the level get activated.
Among the eight 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 Microchip Technology. Out of 306 times, MCHP closed higher 56.21% 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 56.21% with an average market move of 0.97%.