MCO finds support at 50-day moving average
Moody's Corporation (MCO) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MCO finished Wednesday at 286.82 losing $0.13 (-0.05%), but still slightly outperforming the S&P 500 (-0.46%). Trading $3.07 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 previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MCO as at Sep 16, 2020):
Wednesday's trading range has been $4.40 (1.53%), that's below the last trading month's daily average range of $6.61. 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 MCO.
One neutral candlestick pattern matches today's price action, the Doji.
After trading as low as 285.67 during the day, the market found support at the 50-day moving average at 286.58. Unable to break through the key technical resistance level at 288.36 (R1), Moody's closed below it after spiking up to 290.07 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. The share found buyers again today around 285.67 for the third trading day in a row after having found demand at 286.76 in the previous session and at 286.88 two days ago. The last time this happened on September 11th, MCO gained 1.31% on the following trading day.
While MCO is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 293.00 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 281.87 where further sell stops could 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 Moody's. Out of 279 times, MCO closed higher 59.86% 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 62.72% with an average market move of 1.48%.