MNST slips to lowest close since August 4th
Monster Beverage Corporation (MNST) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, MNST ended the week -2.89% lower at 78.99 after losing $1.72 (-2.13%) today on high volume, underperforming the Nasdaq 100 (-1.3%). Today's close at 78.99 marks the lowest recorded closing price since August 4th. Closing below Thursday's low at 79.66, the share confirmed its breakout through the previous session low after trading up to $1.52 below it intraday.
Daily Candlestick Chart (MNST as at Sep 18, 2020):
Friday's trading range has been $2.81 (3.48%), that's above the last trading month's daily average range of $1.96. 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 MNST.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
Monster Beverage closed below the 50-day moving average at 79.99 for the first time since May 4th.
Crossing below the lower Bollinger Band for the first time since September 8th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 82.80 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on September 8th, MNST actually gained 3.30% on the following trading day.
Although the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Further selling could move prices lower should the market test August's close-by low at 77.15.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Monster Beverage. Out of 132 times, MNST closed higher 59.09% 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 56.82% with an average market move of 0.80%.