MLCO closes below its opening price unable to hold early session gains
Melco Resorts & Entertainment Limited (MLCO) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
MLCO finished Tuesday at 16.85 losing $0.23 (-1.35%), significantly underperforming the S&P 500 (0.36%) ahead of Wednesday's earnings report. Trading $0.36 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (MLCO as at Aug 04, 2020):
MLCO is set to report earnings on Wednesday. For the upcoming report, analysts expect the company to have earned $-1.17 per share. The company's last earnings report was released on May 14, 2020, when Melco Resorts & Entertainment Limited reported earnings of $-0.72 per share failing market expectations by -22.0%.
Tuesday's trading range has been $0.55 (3.25%), that's below the last trading month's daily average range of $0.84. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MLCO.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns. The last time a Shooting Star showed up on May 7th, MLCO actually gained 7.38% on the following trading day.
Prices are trading close to the key technical support level at 16.67 (S1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 17.60 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 16.04 where further sell stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day before Earnings Report" stand out. While it is usually interpreted as neutral, it has actually shown to be bearish for Melco Resorts. Out of 31 times, MLCO closed lower 67.74% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 70.97% with an average market move of -3.40%.