MPWR closes within previous day's range
Monolithic Power Systems Inc. (MPWR) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
MPWR finished the month 11.82% higher at 265.01 after losing $4.74 (-1.76%) today, notably underperforming the S&P 500 (0.77%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (MPWR as at Jul 31, 2020):
Friday's trading range has been $11.15 (4.1%), that's above the last trading month's daily average range of $8.13. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MPWR.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Tuesday, MPWR actually gained 6.63% on the following trading day.
Prices are trading close to the key technical resistance level at 271.79 (R1). After having been unable to move lower than 261.39 in the previous session, Monolithic Power found buyers again around the same price level today at 260.49.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 250.28.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 271.79 where further buy 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 "High close to prior High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Monolithic Power. Out of 626 times, MPWR closed higher 55.75% 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 64.38% with an average market move of 1.58%.