MOMO closes below its opening price unable to hold early session gains
Momo Inc. (MOMO) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, MOMO ended Wednesday at 15.09 gaining $0.13 (0.87%), strongly outperforming the S&P 500 (-0.46%). Trading $0.14 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on August 26th, MOMO lost -1.76% on the following trading day. 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 Sep 16, 2020):
Wednesday's trading range has been $0.36 (2.38%), that's far below the last trading month's daily average range of $0.75. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for MOMO.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Momo. Out of 46 times, MOMO closed lower 58.70% 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 seven trading days, showing a win rate of 60.87% with an average market move of -0.59%.