MGM loses $0.55 (-3.31%) after posting strong earnings
MGM Resorts International (MGM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
MGM ended the month -4.23% lower at 16.09 after losing $0.55 (-3.31%) today on high volume, notably underperforming the S&P 500 (0.77%) following Thursday's earnings report. Trading up to $0.41 lower after the open, MGM Resorts 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 failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MGM as at Jul 31, 2020):
MGM reported earnings of $-1.52 per share after Thursday's market close. With analysts having expected an EPS of $-1.63, MGM Resorts International topped market expectations by 6.7%. The company's last earnings report was released on April 30, 2020, when MGM Resorts International reported earnings of $-0.45 per share failing market expectations by -462.5%.
Friday's trading range has been $0.91 (5.69%), that's slightly above the last trading month's daily average range of $0.87. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MGM.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish High-Wave Candle showed up on May 4th, MGM actually lost -3.45% on the following trading day.
The stock closed back below the 20-day moving average at 16.34.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 16.70 where further buy stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for MGM Resorts. Out of 17 times, MGM closed higher 70.59% 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 47.06% with an average market move of 0.41%.