MHK breaks below Thursday's low
Mohawk Industries Inc. (MHK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MHK finished the month -21.53% lower at 79.85 after losing $3.44 (-4.13%) today, notably underperforming the S&P 500 (0.77%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 83.25, Mohawk confirmed its breakout through the previous session low after trading up to $4.25 below it intraday.
Daily Candlestick Chart (MHK as at Jul 31, 2020):
Friday's trading range has been $5.11 (6.09%), that's slightly below the last trading month's daily average range of $5.53. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MHK.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 78.55 (S1).
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Mohawk. Out of 303 times, MHK closed higher 55.78% 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 58.09% with an average market move of 0.72%.