MPLX breaks below 50-day moving average for the first time since June 19th
MPLX LP Representing Limited Partner Interests (MPLX) Technical Analysis Report for Jul 17, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, MPLX finished Wednesday at 31.43 tanking $0.44 (-1.38%), underperforming the S&P 500 (-0.65%). This is the biggest single-day loss in over a month. Today's close at 31.43 marks the lowest recorded closing price since June 17th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 31.80, the stock confirmed its breakout through the prior session low after trading up to $0.40 below it intraday.
Daily Candlestick Chart (MPLX as at Jul 17, 2019):
Wednesday's trading range has been $0.59 (1.85%), that's far above the last trading month's daily average range of $0.46. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MPLX.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 31.35 (S1). The market closed below the 50-day moving average at 31.58 for the first time since June 19th. When this moving average was crossed below the last time on March 22nd, MPLX lost -1.72% on the following trading day.
Crossing below the lower Bollinger Band for the first time since May 13th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 32.07 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Further selling could move prices lower should the market test June's nearby low at 30.63.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for MPLX LP. Out of 94 times, MPLX closed higher 52.13% 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 67.02% with an average market move of 4.19%.