MLM tanks $15.60 (-6.84%) after posting strong earnings
Martin Marietta Materials Inc. (MLM) Technical Analysis Report for Jul 28, 2020 | by Techniquant Editorial Team
MLM ended Tuesday at 212.40 tanking $15.60 (-6.84%) on high volume, notably underperforming the S&P 500 (-0.65%) following today's earnings report. This is the biggest single-day loss in over a month. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 221.98, the market confirmed its breakout through the previous session low after trading up to $10.71 below it intraday.
Daily Candlestick Chart (MLM as at Jul 28, 2020):
MLM reported earnings of $3.49 per share before today's market open. With analysts having expected an EPS of $3.02, Martin Marietta Materials Inc. topped market expectations by 15.6%. The company's last earnings report was released on May 5, 2020, when Martin Marietta Materials Inc. reported earnings of $0.41 per share failing market expectations by -26.8%.
Tuesday's trading range has been $18.73 (8.29%), that's far above the last trading month's daily average range of $6.08. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MLM.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on June 8th, MLM lost -5.99% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 208.30 (S1). The share closed below the 20-day moving average at 216.82 for the first time since July 9th.
Martin Marietta shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to July's low at 202.51, downside momentum might accelerate should the stock mark new lows for the month.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Though it is usually interpreted as neutral, it has actually shown to be bearish for Martin Marietta. Out of 12 times, MLM closed lower 66.67% 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 75.00% with an average market move of -0.75%.