MNK breaks back below 20-day moving average
Mallinckrodt plc (MNK) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
MNK finished the month -4.96% lower at 2.68 after losing $0.10 (-3.6%) today on low volume, notably underperforming the S&P 500 (1.54%). Closing below Monday's low at 2.69, Mallinckrodt plc confirmed its breakout through the previous session low after trading up to $0.05 below it intraday.
Daily Candlestick Chart (MNK as at Jun 30, 2020):
Tuesday's trading range has been $0.14 (5.11%), that's far below the last trading month's daily average range of $0.24. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MNK.
The share closed back below the 20-day moving average at 2.74 for the first time since June 19th. When this moving average was crossed below the last time on May 27th, MNK lost -4.62% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 2.63 where further sell stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Its common bearish interpretation has been confirmed for Mallinckrodt plc. Out of 97 times, MNK closed lower 54.64% 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 57.73% with an average market move of -1.52%.