MMSI finds buyers at key support level
Merit Medical Systems Inc. (MMSI) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MMSI ended Wednesday at 43.16 losing $0.37 (-0.85%), slightly underperforming the S&P 500 (-0.46%). Today's close at 43.16 marks the lowest recorded closing price since August 6th. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MMSI as at Sep 16, 2020):
Wednesday's trading range has been $1.67 (3.8%), that's slightly above the last trading month's daily average range of $1.66. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MMSI. Prices continued to consolidate within a tight trading range between 42.47 and 44.61 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, one bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern. The last time a Last Engulfing Bottom Pattern showed up on July 9th, MMSI gained 2.96% on the following trading day.
After trading down to 42.47 earlier during the day, Merit Medical bounced off the key technical support level at 42.76 (S1). The failure to close below the support could increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 44.45 (R1). After having been unable to move lower than 42.76 in the previous session, the share found buyers again around the same price level today at 42.47.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 47.89.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Trading close to July's low at 40.50 we might see further downside momentum if potential sell stops at the level get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Merit Medical. Out of 444 times, MMSI closed higher 58.11% 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 55.18% with an average market move of 0.90%.