MDGL finds buyers at key support level
Madrigal Pharmaceuticals Inc. (MDGL) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MDGL finished Wednesday at 108.51 gaining $1.59 (1.49%) on high volume, notably outperforming the S&P 500 (-0.46%). Trading up to $3.14 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MDGL as at Sep 16, 2020):
Wednesday's trading range has been $5.04 (4.68%), that's above the last trading month's daily average range of $4.10. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MDGL.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man. The last time a Hanging Man showed up on September 4th, MDGL lost -6.39% on the following trading day.
After trading down to 104.49 earlier during the day, the stock bounced off the key technical support level at 106.04 (S1). The failure to close below the support could increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 109.91 (R1). After having been unable to move above 109.00 in the previous session, Madrigal Pharmaceuticals ran into sellers again around the same price level today, failing to move higher than 109.53.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
As prices are trading close to September's high at 113.46, upside momentum might speed up should the share mark new highs for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Madrigal Pharmaceuticals. Out of 407 times, MDGL closed lower 51.84% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 55.28% with an average market move of -0.73%.