MOMO closes above its opening price after recovering from early selling pressure
Momo Inc. (MOMO) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
MOMO ended the month 5.66% higher at 18.47 after gaining $0.19 (1.04%) today, slightly outperforming the S&P 500 (0.77%). Trading up to $0.27 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above 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 Jul 31, 2020):
Friday's trading range has been $0.57 (3.1%), that's slightly below the last trading month's daily average range of $0.79. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MOMO.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on July 7th, MOMO gained 4.24% on the following trading day.
Prices are trading close to the key technical resistance level at 18.84 (R1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the nearby swing low at 17.98 where further sell stops might get activated. As prices are trading close to July's low at 17.23, downside momentum could speed up should Momo mark new lows for the month.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Momo. Out of 206 times, MOMO closed lower 54.85% 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 five trading days, showing a win rate of 52.91% with an average market move of 0.14%.