MLCO slumps, losing $1.01 (-5.14%) within a single day on high volume
Melco Resorts & Entertainment Limited (MLCO) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MLCO ended Wednesday at 18.65 tanking $1.01 (-5.14%) on high volume, notably underperforming the S&P 500 (-0.46%). This is the biggest single-day loss in over two months. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 19.39, the market confirmed its breakout through the previous session low after trading up to $0.81 below it intraday.
Daily Candlestick Chart (MLCO as at Sep 16, 2020):
Wednesday's trading range has been $1.02 (5.21%), that's above the last trading month's daily average range of $0.84. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MLCO.
Two candlestick patterns are matching today's price action, the Black Candle and the Evening Star which are both known as bearish patterns. The last time a Black Candle showed up on September 11th, MLCO actually gained 3.74% on the following trading day.
The share closed back below the 20-day moving average at 19.17.
Though the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 18.02 where further sell stops might get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Evening Star" stand out. Its common bearish interpretation has been confirmed for Melco Resorts. Out of 7 times, MLCO closed lower 71.43% 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 eight trading days, showing a win rate of 57.14% with an average market move of -1.67%.