MO stuck within tight trading range
Altria Group Inc. (MO) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
MO ended the week -2.27% lower at 45.17 after losing $0.48 (-1.05%) today, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Today's close at 45.17 marks the lowest recorded closing price since November 1, 2019. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (MO as at Feb 14, 2020):
Friday's trading range has been $0.87 (1.9%), that's slightly below the last trading month's daily average range of $0.91. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for MO. Prices continued to consolidate within a tight trading range between 44.86 and 45.91 where it has been caught now for the last three trading days.
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.
Prices broke below the key technical support level at 45.26 (now R1), which is likely to act as resistance going forward. The share found buyers again today around 44.91 for the third trading day in a row after having found demand at 44.97 in the prior session and at 44.86 two days ago. The last time this happened on December 13, 2019, MO gained 0.88% on the following trading day.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could speed up should prices move above the close-by swing high at 45.91 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 44.86 where further sell stops might get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for Altria Group. Out of 251 times, MO closed higher 57.77% 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 56.57% with an average market move of 0.50%.