MLCO breaks below Thursday's low
Melco Resorts & Entertainment Limited (MLCO) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MLCO finished the week -5.48% lower at 14.31 after losing $0.75 (-4.98%) today, notably underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 14.31 marks the lowest recorded closing price since April 21st. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 14.82, the share confirmed its breakout through the prior session low after trading up to $0.64 below it intraday.
Daily Candlestick Chart (MLCO as at May 22, 2020):
Friday's trading range has been $0.81 (5.44%), that's slightly below the last trading month's daily average range of $0.93. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MLCO.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 14.18 during the day, the market found support at the 50-day moving average at 14.27. Prices broke below the key technical support level at 14.88 (now R1), which is likely to act as resistance going forward. The last time this happened on March 26th, MLCO lost -8.78% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Melco Resorts. Out of 300 times, MLCO closed higher 50.67% 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 56.33% with an average market move of 1.21%.