MTG rises to highest close since June 10th
MGIC Investment Corporation (MTG) Technical Analysis Report for Aug 10, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, MTG finished Monday at 8.99 surging $0.39 (4.53%) on high volume, significantly outperforming the S&P 500 (0.27%). Today's close at 8.99 marks the highest recorded closing price since June 10th. The bulls were in full control today, moving the market higher throughout the whole session.
Daily Candlestick Chart (MTG as at Aug 10, 2020):
Monday's trading range has been $0.54 (6.26%), that's far above the last trading month's daily average range of $0.33. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MTG.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 8.72 (now S1), which is likely to act as support going forward.
Crossing above the upper Bollinger Band for the first time since June 8th, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 8.01 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on June 8th, MTG actually lost -7.50% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for MGIC Investment. Out of 168 times, MTG closed lower 52.38% 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 58.33% with an average market move of -0.82%.