MNK closes higher for the 6th day in a row
Mallinckrodt plc (MNK) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, MNK finished Thursday at 2.32 gaining $0.19 (8.92%) on low volume, notably outperforming the S&P 500 (6.24%). Closing above Wednesday's high at 2.20, Mallinckrodt plc confirmed its breakout through the prior session high after trading up to $0.17 above it intraday.
Daily Candlestick Chart (MNK as at Mar 26, 2020):
Thursday's trading range has been $0.37 (17.62%), that's below the last trading month's daily average range of $0.59. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MNK.
One bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on March 19th, MNK gained 26.40% on the following trading day.
After trading down to 2.00 earlier during the day, the share bounced off the key technical support level at 2.01 (S1). The failure to close below the support might increase that levels importance as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 1.72 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 "6 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for Mallinckrodt plc. Out of 8 times, MNK closed higher 75.00% 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 62.50% with an average market move of 4.64%.