MLCO breaks below Tuesday's low
Melco Resorts & Entertainment Limited (MLCO) Technical Analysis Report for Jan 15, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MLCO finished Wednesday at 23.60 losing $0.20 (-0.84%), strongly underperforming the S&P 500 (0.19%). Trading $0.13 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Tuesday's low at 23.61, Melco Resorts confirmed its breakout through the previous session low after trading up to $0.11 below it intraday.
Daily Candlestick Chart (MLCO as at Jan 15, 2020):
Wednesday's trading range has been $0.31 (1.31%), that's below the last trading month's daily average range of $0.48. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for MLCO.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Bullish Hikkake Pattern showed up on November 8, 2019, MLCO actually lost -2.43% on the following trading day.
After having been unable to move above 23.89 in the prior session, the stock ran into sellers again around the same price level today, missing to move higher than 23.81.
Although the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Its common bullish interpretation has been confirmed for Melco Resorts. Out of 110 times, MLCO closed higher 51.82% 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 58.18% with an average market move of 2.22%.