MHK finds buyers at key support level
Mohawk Industries Inc. (MHK) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
MHK finished Thursday at 82.29 edging lower $0.08 (-0.1%), notably underperforming the S&P 500 (6.24%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MHK as at Mar 26, 2020):
Thursday's trading range has been $5.07 (6.06%), that's below the last trading month's daily average range of $8.30. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for MHK.
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. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on March 17th, MHK lost -24.25% on the following trading day.
After trading down to 79.92 earlier during the day, the market bounced off the key technical support level at 81.33 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move above 86.35 in the prior session, the stock ran into sellers again around the same price level today, missing to move higher than 84.99.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 86.35 where further buy stops could get activated.
Among the four 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 Mohawk. Out of 419 times, MHK closed higher 57.76% 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 0.76%.