MLCO breaks back below 50-day moving average
Melco Resorts & Entertainment Limited (MLCO) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
MLCO ended the month 6.06% higher at 16.46 after losing $0.17 (-1.02%) today, notably underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MLCO as at Jul 31, 2020):
Friday's trading range has been $0.64 (3.87%), that's slightly below the last trading month's daily average range of $0.82. 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 MLCO.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Hanging Man which are both known as bearish patterns. The last time a Hanging Man showed up on May 29th, MLCO actually gained 2.87% on the following trading day.
The share closed back below the 50-day moving average at 16.51.
Melco Resorts shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the close-by swing high at 16.98 where further buy stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Melco Resorts. Out of 69 times, MLCO closed higher 60.87% 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 66.67% with an average market move of 2.45%.