MMSI breaks below Monday's low
Merit Medical Systems Inc. (MMSI) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, MMSI finished Tuesday at 42.93 losing $0.87 (-1.99%), notably underperforming the S&P 500 (0.36%). Closing below Monday's low at 43.71, the share confirmed its breakout through the prior session low after trading up to $0.93 below it intraday.
Daily Candlestick Chart (MMSI as at Aug 04, 2020):
Tuesday's trading range has been $1.42 (3.24%), that's below the last trading month's daily average range of $2.00. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MMSI.
Two candlestick patterns are matching today's price action, the Black Candle and the Three Black Crows which are both known as bearish patterns. The last time a Three Black Crows showed up on December 20, 2017, MMSI lost -0.46% on the following trading day.
Prices are trading close to the key technical support level at 42.44 (S1).
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could accelerate should prices move below the close-by swing low at 41.14 where further sell stops might get triggered. Trading close to June's low at 40.39 we could see further downside momentum if potential sell stops at the level get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Merit Medical. Out of 515 times, MMSI closed higher 52.04% 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 55.92% with an average market move of 0.79%.