MKL breaks back above 20-day moving average
Markel Corporation (MKL) Technical Analysis Report for May 15, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, MKL ended Wednesday at 1047.17 gaining $12.40 (1.2%), outperforming the S&P 500 (0.58%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (MKL as at May 15, 2019):
Wednesday's trading range has been $26.67 (2.59%), that's above the last trading month's daily average range of $21.38. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MKL. Prices continued to consolidate within a tight trading range between 1026.32 and 1060.00 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Notwithstanding a weak opening the market managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on May 10th, MKL actually lost -1.59% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
The share managed to close back above the 20-day moving average at 1042.21. Unable to break through the key technical resistance level at 1048.18 (R1), the stock closed below it after spiking up to 1052.99 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
Although Markel is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 1060.00 where further buy stops might get activated. With prices trading close to this year's high at 1085.00, upside momentum could speed up should MKL be able to break out to new highs for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for Markel. Out of 87 times, MKL closed higher 54.02% 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 55.17% with an average market move of 0.49%.