MGM stuck within tight trading range
MGM Resorts International (MGM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MGM ended the week 14.8% higher at 15.90 after edging lower $0.09 (-0.56%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (MGM as at May 22, 2020):
Friday's trading range has been $0.73 (4.59%), that's far below the last trading month's daily average range of $1.08. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MGM. Prices continued to consolidate within a tight trading range between 15.27 and 16.58 where it has been caught now for the last three trading days.
Three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji. The last time a Doji showed up on April 15th, MGM lost -4.16% on the following trading day.
Prices are trading close to the key technical support level at 15.09 (S1).
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 16.58 where further buy stops might get activated. Further buying could move prices higher should the market test April's close-by high at 17.63.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for MGM Resorts. Out of 51 times, MGM closed higher 52.94% 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 six trading days, showing a win rate of 58.82% with an average market move of 0.22%.