TMUS breaks back above 20-day moving average
T-Mobile US Inc. (TMUS) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
TMUS finished the month 3.1% higher at 107.38 after surging $1.90 (1.8%) today, slightly outperforming the Nasdaq 100 (1.78%). This is the biggest single-day gain in over a month. Today's close at 107.38 marks the highest recorded closing price since June 25th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 105.95, the share confirmed its breakout through the prior session high after trading up to $1.47 above it intraday.
Daily Candlestick Chart (TMUS as at Jul 31, 2020):
Friday's trading range has been $2.37 (2.24%), that's far above the last trading month's daily average range of $1.71. 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 TMUS.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern. The last time a Bearish Hikkake Pattern showed up on June 25th, TMUS lost -4.53% on the following trading day.
T-Mobile US managed to close back above the 20-day moving average at 105.60. Prices are trading close to the key technical resistance level at 107.68 (R1).
Crossing above the upper Bollinger Band for the first time since June 25th, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 105.60 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 111.58, upside momentum could speed up should the market be able to break out to new highs for the year. As prices are trading close to July's high at 107.68, upside momentum might accelerate should the stock mark new highs for the month.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the upper Bollinger Band" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for T-Mobile US. Out of 91 times, TMUS closed lower 56.04% 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 three trading days, showing a win rate of 54.95% with an average market move of -0.56%.