MOS finds buyers at key support level
Mosaic Company (MOS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MOS ended Wednesday at 18.10 gaining $0.07 (0.39%), outperforming the S&P 500 (-0.46%). Trading up to $0.35 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (MOS as at Sep 16, 2020):
Wednesday's trading range has been $0.69 (3.81%), that's above the last trading month's daily average range of $0.61. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MOS. Prices continued to consolidate within a tight trading range between 17.67 and 18.45 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on August 3rd, MOS gained 13.52% on the following trading day. Additionally, four candlestick patterns are matching today's price action, the Gravestone Doji which is known as bearish pattern and three neutral patterns, the Doji, the Long-Legged Doji and the Rickshaw-Man.
After trading down to 17.74 earlier during the day, the market bounced off the key technical support level at 17.94 (S1). The failure to close below the support might increase that levels importance as support going forward. After having been unable to move lower than 17.80 in the prior session, the stock found buyers again around the same price level today at 17.74.
Although Mosaic is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the nearby swing high at 18.45 where further buy stops could get triggered. As prices are trading close to September's high at 19.03, upside momentum might accelerate should MOS mark new highs for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Gravestone Doji" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Mosaic. Out of 39 times, MOS closed higher 61.54% 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 61.54% with an average market move of 0.16%.