MHK finds buyers around 81.62 for the third day in a row
Mohawk Industries Inc. (MHK) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
MHK ended the week 8.79% higher at 83.31 after edging lower $0.83 (-0.99%) today on low volume, strongly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MHK as at May 22, 2020):
Friday's trading range has been $3.55 (4.19%), that's below the last trading month's daily average range of $4.39. 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 80.41 and 86.87 where it has been caught now for the whole last trading week.
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.
Prices are trading close to the key technical resistance level at 86.35 (R1). The share found buyers again today around 81.62 for the third trading day in a row after having found demand at 81.44 in the prior session and at 81.30 two days ago. The last time this happened on May 7th, MHK gained 5.59% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 85.58 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 81.30 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Mohawk. Out of 755 times, MHK closed higher 56.29% 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 56.42% with an average market move of 0.66%.