MDT closes below its opening price unable to hold early session gains
Medtronic plc. (MDT) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MDT finished Wednesday at 107.49 edging lower $0.08 (-0.07%) on low volume, but still slightly outperforming the S&P 500 (-0.46%). Trading $0.61 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 (MDT as at Sep 16, 2020):
Wednesday's trading range has been $1.24 (1.15%), that's far below the last trading month's daily average range of $2.13. 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 prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Regardless of a strong opening Medtronic plc. closed below the previous day's open and close, forming a bearish Engulfing Candle.
After trading down to 107.32 earlier during the day, the share bounced off the key technical support level at 107.35 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move lower than 107.23 in the prior session, the market found buyers again around the same price level today at 107.32. The last time this happened on August 26th, MDT gained 2.67% on the following trading day.
Though MDT is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 108.69 where further buy stops might get activated. As prices are trading close to September's high at 109.16, upside momentum could speed up should the stock mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Medtronic plc.. Out of 396 times, MDT closed higher 59.85% 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 56.57% with an average market move of 0.66%.