MNST unable to break through key resistance level
Monster Beverage Corporation (MNST) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MNST ended Wednesday at 81.87 losing $1.27 (-1.53%), but still slightly outperforming the Nasdaq 100 (-1.67%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 82.42, the share confirmed its breakout through the prior session low after trading up to $0.55 below it intraday.
Daily Candlestick Chart (MNST as at Sep 16, 2020):
Wednesday's trading range has been $2.13 (2.55%), that's slightly above the last trading month's daily average range of $1.86. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MNST.
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. Despite a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Closing Marubozu and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on September 8th, MNST actually gained 3.30% on the following trading day.
Unable to break through the key technical resistance level at 83.84 (R1), the stock closed below it after spiking up to 84.00 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move above 83.93 in the prior session, Monster Beverage ran into sellers again around the same price level today, failing to move higher than 84.00.
While MNST is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could speed up should prices move below the nearby swing low at 80.42 where further sell stops might get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Closing Marubozu" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Monster Beverage. Out of 7 times, MNST closed higher 57.14% 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 71.43% with an average market move of 4.07%.