MO breaks back above 20-day moving average
Altria Group Inc. (MO) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
MO ended the week 3.12% higher at 37.73 after gaining $0.19 (0.51%) today on low volume, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.27 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (MO as at May 22, 2020):
Friday's trading range has been $0.53 (1.41%), that's below the last trading month's daily average range of $1.18. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MO. Prices continued to consolidate within a tight trading range between 37.09 and 38.10 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on March 31st, MO lost -2.74% on the following trading day.
Altria Group managed to close back above the 20-day moving average at 37.50. The share was bought again around 37.23 after having seen lows at 37.22, 37.09 and 37.10 in the last three trading sessions. Obviously there is something going on at that level.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 38.10 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 37.09 where further sell stops might get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Altria Group. Out of 77 times, MO 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 70.13% with an average market move of 0.97%.