MHK breaks back above 20-day moving average
Mohawk Industries Inc. (MHK) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, MHK ended the month 9.18% higher at 101.76 after gaining $1.96 (1.96%) today, slightly outperforming the S&P 500 (1.54%). Closing above Monday's high at 100.05, Mohawk confirmed its breakout through the previous session high after trading up to $2.48 above it intraday.
Daily Candlestick Chart (MHK as at Jun 30, 2020):
Tuesday's trading range has been $4.57 (4.6%), that's slightly below the last trading month's daily average range of $5.50. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MHK.
One bullish candlestick pattern matches today's price action, the White Candle.
The stock managed to close back above the 20-day moving average at 100.98 for the first time since June 23rd. When this moving average was crossed above the last time on June 23rd, MHK actually lost -4.42% on the following trading day. Prices are trading close to the key technical resistance level at 103.82 (R1).
Though 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 104.39 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Mohawk. Out of 760 times, MHK closed higher 56.05% 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 56.71% with an average market move of 0.81%.