MMSI closes above its opening price after recovering from early selling pressure
Merit Medical Systems Inc. (MMSI) Technical Analysis Report for Dec 05, 2019 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, MMSI ended Thursday at 28.46 gaining $0.06 (0.21%) on high volume, slightly outperforming the S&P 500 (0.15%). Today's close at 28.46 marks the highest recorded closing price since October 30th. Trading up to $0.40 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MMSI as at Dec 05, 2019):
Thursday's trading range has been $0.60 (2.12%), that's below the last trading month's daily average range of $0.85. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for MMSI. Prices continued to consolidate within a tight trading range between 27.39 and 28.53 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Hanging Man.
Prices are trading close to the key technical support level at 28.37 (S1). After having been unable to move above 28.51 in the previous session, Merit Medical ran into sellers again around the same price level today, failing to move higher than 28.53. The last time this happened on Tuesday, MMSI actually gained 1.43% on the following trading day.
Although the share is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could accelerate should prices move below the nearby swing low at 27.39 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for Merit Medical. Out of 152 times, MMSI closed higher 56.58% 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 50.66% with an average market move of 0.84%.