MCHP closes within previous day's range
Microchip Technology Incorporated (MCHP) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
MCHP finished the week 2.97% higher at 109.36 after losing $1.01 (-0.92%) today on low volume, strongly underperforming the Nasdaq 100 (0.29%) ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (MCHP as at Feb 14, 2020):
Friday's trading range has been $2.31 (2.09%), that's slightly below the last trading month's daily average range of $2.59. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MCHP. Prices continued to consolidate within a tight trading range between 108.13 and 110.96 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on February 7th, MCHP actually gained 1.83% on the following trading day.
Prices are trading close to the key technical support level at 108.30 (S1). Prices are trading close to the key technical resistance level at 110.97 (R1). The share was sold again around 110.95 after having seen highs at 110.96, 110.82 and 110.78 in the last three trading sessions. Obviously there is something going on at that level.
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 nearby swing high at 110.96 where further buy stops could get activated. Selling might accelerate should prices move below the close-by swing low at 108.13 where further sell stops could get triggered. With prices trading close to this year's high at 112.47, upside momentum might speed up should the stock be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Microchip Technology. Out of 632 times, MCHP closed higher 53.64% 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 56.65% with an average market move of 0.88%.