MLM closes below its opening price unable to hold early session gains
Martin Marietta Materials Inc. (MLM) Technical Analysis Report for Jul 23, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MLM ended Thursday at 223.43 losing $0.90 (-0.4%), but still outperforming the S&P 500 (-1.23%). Trading $3.65 higher after the open, Martin Marietta was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Wednesday's low at 223.68, the market confirmed its breakout through the previous session low after trading up to $1.40 below it intraday.
Daily Candlestick Chart (MLM as at Jul 23, 2020):
Thursday's trading range has been $5.11 (2.28%), that's slightly below the last trading month's daily average range of $5.40. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MLM.
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 stock ran into sellers again today around 227.39 for the third trading day in a row after having found sellers at 228.09 in the prior session and at 227.18 two days ago. The last time this happened on June 15th, MLM actually gained 7.50% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 228.09 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 219.31 where further sell stops could get activated. Further buying might move prices higher should the market test June's close-by high at 230.46.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Martin Marietta. Out of 312 times, MLM closed higher 54.81% 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 56.73% with an average market move of 0.86%.