MCO still stuck within tight trading range
Moody's Corporation (MCO) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
MCO finished the week 2.19% higher at 256.82 after gaining $3.05 (1.2%) today on low volume, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $3.67 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 256.44, the market confirmed its breakout through the previous session high after trading up to $2.04 above it intraday.
Daily Candlestick Chart (MCO as at May 22, 2020):
Friday's trading range has been $6.37 (2.49%), that's below the last trading month's daily average range of $8.10. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MCO. Prices continued to consolidate within a tight trading range between 252.02 and 262.59 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on May 5th, MCO actually lost -3.59% on the following trading day.
After having been unable to move lower than 252.02 in the prior session, the share found buyers again around the same price level today at 252.11.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 262.59 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 252.02 where further sell stops might get activated. Trading close to March's high at 270.35 we could see further upside momentum if potential buy stops at the level get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Moody's. Out of 505 times, MCO closed higher 55.84% 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 61.39% with an average market move of 1.18%.