MOMO closes below its opening price unable to hold early session gains
Momo Inc. (MOMO) Technical Analysis Report for Apr 12, 2019 | by Techniquant Editorial Team
MOMO finished the week -4.75% lower at 38.11 after gaining $0.91 (2.45%) today, significantly outperforming the S&P 500 (0.66%). Trading $0.77 higher after the open, Momo was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (MOMO as at Apr 12, 2019):
Friday's trading range has been $1.12 (2.93%), that's slightly below the last trading month's daily average range of $1.24. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for MOMO.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on April 5th, MOMO lost -1.15% on the following trading day.
After spiking up to 38.96 during the day, the share found resistance at the 20-day moving average at 38.65.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the close-by swing low at 36.69 where further sell stops could get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Its common bearish interpretation has been confirmed for Momo. Out of 31 times, MOMO closed lower 51.61% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after two trading days, showing a win rate of 67.74% with an average market move of 0.35%.