MCHP closes below its opening price unable to hold early session gains
Microchip Technology Incorporated (MCHP) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MCHP ended Wednesday at 103.57 edging lower $0.05 (-0.05%), but still significantly outperforming the Nasdaq 100 (-1.67%). Trading $1.23 higher after the open, the stock 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 in a lackluster session.
Daily Candlestick Chart (MCHP as at Sep 16, 2020):
Wednesday's trading range has been $2.12 (2.03%), that's below the last trading month's daily average range of $3.11. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MCHP.
Prices are trading close to the key technical support level at 102.59 (S1). After spiking up to 105.42 during the day, the share found resistance at the 50-day moving average at 104.71. The last time this happened on August 17th, MCHP actually gained 3.86% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 50" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Microchip Technology. Out of 32 times, MCHP closed higher 50.00% 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 68.75% with an average market move of 2.23%.