Quarterly Earnings Fall Short, But Stock Finds Support
Marriott International MAR experienced a decline in its shares on Monday after third-quarter earnings did not meet expectations. Despite this downturn, the stock seems to have found a support level at a critical price point, reflecting what analysts refer to as “market memory.”
Often, a price that previously acted as a ceiling for stock prices can later provide support, as seen in the Marriott stock chart. This dynamic has led our team of technical analysts to choose Marriott as our Stock of the Day.
In July, Marriott’s shares saw an upward trend, driven by demand that exceeded supply. This caused buyers to push prices up in hopes of attracting sellers.
However, when the stock reached the $254 mark, market dynamics shifted. There was ample stock for sale, and every buy order could be executed without raising the price.
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In response, some sellers became anxious that others might undercut their prices. Fearing a race to lower prices, they began to slash their own asking prices.
This wave of concern among sellers sparked a chain reaction, leading to a downward spiral in stock prices.
Marriott broke through the $254 resistance in early October, gaining traction. This move prompted some investors who had sold at that resistance to reconsider their choices and attempt to repurchase at the same price.
As the stock price reversed and returned to around $254, many of these sellers placed buy orders, hoping to regain their shares. The result has been a notable concentration of buy orders that have formed support around what was once a resistance level.
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