MO slips to lowest close since July 13th
Altria Group Inc. (MO) Technical Analysis Report for Sep 17, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, MO ended Thursday at 40.86 tanking $0.90 (-2.16%), strongly underperforming the S&P 500 (-0.84%). Today's close at 40.86 marks the lowest recorded closing price since July 13th. Trading $0.38 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Tuesday, MO lost -2.38% on the following trading day. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (MO as at Sep 17, 2020):
Thursday's trading range has been $1.14 (2.74%), that's above the last trading month's daily average range of $0.86. 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 MO.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 40.47 (S1). Unable to break through the key technical resistance level at 41.85 (R1), Altria Group closed below it after spiking up to 41.96 earlier during the day. The failure to close above the resistance might increase that levels importance going forward.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 43.25.
Although the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Further selling might move prices lower should the market test August's nearby low at 40.67.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Altria Group. Out of 54 times, MO closed higher 66.67% 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 50.00% with an average market move of 0.50%.