MDT breaks below key technical support level
Medtronic plc. (MDT) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
MDT ended Tuesday at 96.29 losing $1.04 (-1.07%), notably underperforming the S&P 500 (0.36%). Trading $0.68 higher after the open, the share 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 missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MDT as at Aug 04, 2020):
Tuesday's trading range has been $1.61 (1.66%), that's below the last trading month's daily average range of $2.01. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MDT.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Prices broke below the key technical support level at 96.38 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 95.96 in the prior session, Medtronic plc. found buyers again around the same price level today at 95.97. The last time this happened on July 28th, MDT gained 2.46% on the following trading day.
Although the market 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 speed up should prices move above the nearby swing high at 97.65 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 94.64 where further sell stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Medtronic plc.. Out of 574 times, MDT closed higher 56.45% 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 58.71% with an average market move of 0.60%.