MRO.L closes lower for the 2nd day in a row
Melrose Industries (MRO.L) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, MRO.L ended the week 3.74% higher at 170.80 after losing £5.90 (-3.34%) today, notably underperforming the FTSE 100 (-0.36%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 172.20, the market confirmed its breakout through the prior session low after trading up to £4.40 below it intraday.
Daily Candlestick Chart (MRO.L as at Jan 11, 2019):
Friday's trading range has been £9.25 (5.22%), that's far above the last trading month's daily average range of £6.71. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for MRO.L.
In spite of a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
After trading as low as 167.80 during the day, Melrose Industries found support at the 50-day moving average at 168.47. Prices broke below the key technical support level at 176.20 (now R1), which is likely to act as resistance going forward. The last time this happened on December 10, 2018, MRO.L actually gained 4.78% on the following trading day. After having been unable to move above 177.95 in the prior session, the stock ran into sellers again around the same price level today, failing to move higher than 177.05.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 162.49.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. Its common bullish interpretation has been confirmed for Melrose Industries. Out of 37 times, MRO.L closed higher 54.05% 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 70.27% with an average market move of 2.76%.