MHK closes within prior day's range
Mohawk Industries Inc. (MHK) Technical Analysis Report for Nov 09, 2018 | by Techniquant Editorial Team
MHK finished the week -4.65% lower at 125.65 after losing $1.58 (-1.24%) today, slightly underperforming the S&P 500 (-0.92%). Trading $1.70 higher after the open, Mohawk 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.
Daily Candlestick Chart (MHK as at Nov 09, 2018):
Friday's trading range has been $4.93 (3.88%), that's slightly below the last trading month's daily average range of $5.34. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MHK. Prices continued to consolidate within a tight trading range between 123.52 and 128.76 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on November 2nd, MHK lost -2.92% on the following trading day.
Prices are trading close to the key technical support level at 123.52 (S1). The share ran into sellers again today around 128.76 for the third trading day in a row after having found sellers at 128.64 in the previous session and at 127.99 two days ago.
Although the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might speed up should prices move below the nearby swing low at 123.52 where further sell stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Mohawk. Out of 197 times, MHK closed higher 52.79% 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 60.91% with an average market move of 0.92%.