MLM breaks back above 20-day moving average
Martin Marietta Materials Inc. (MLM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
MLM ended the week 6.91% higher at 179.69 after edging higher $1.06 (0.59%) today on low volume, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MLM as at May 22, 2020):
Friday's trading range has been $5.64 (3.1%), that's below the last trading month's daily average range of $8.30. 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 MLM. Prices continued to consolidate within a tight trading range between 174.25 and 183.43 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Martin Marietta managed to close back above the 20-day moving average at 178.98. Prices are trading close to the key technical resistance level at 184.30 (R1). The stock found buyers again today around 177.32 for the third trading day in a row after having found demand at 176.55 in the prior session and at 176.40 two days ago. The last time this happened on May 8th, MLM actually lost -3.43% on the following trading day.
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 183.43 where further buy stops might get triggered. As prices are trading close to May's high at 192.18, upside momentum could accelerate should the share mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Martin Marietta. Out of 786 times, MLM closed higher 50.13% 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 52.16% with an average market move of 0.29%.