MTG runs into sellers again around 8.30
MGIC Investment Corporation (MTG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, MTG ended the month 0.98% higher at 8.27 after gaining $0.07 (0.85%) today, slightly outperforming the S&P 500 (0.77%). Today's close at 8.27 marks the highest recorded closing price since June 23rd. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (MTG as at Jul 31, 2020):
Friday's trading range has been $0.25 (3.08%), that's below the last trading month's daily average range of $0.36. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MTG.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
The stock managed to close above the 50-day moving average at 8.23 for the first time since July 15th. When this moving average was crossed above the last time on July 15th, MTG actually lost -3.23% on the following trading day. After having been unable to move above 8.27 in the previous session, the share ran into sellers again around the same price level today, missing to move higher than 8.30.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
As prices are trading close to July's high at 8.46, upside momentum might speed up should the market mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Higher Closes" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for MGIC Investment. Out of 81 times, MTG closed lower 53.09% 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 10 trading days, showing a win rate of 54.32% with an average market move of -0.78%.