ASML dominated by bears dragging the market lower throughout the day
ASML Holding N.V. (ASML) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, ASML ended the month -3.89% lower at 353.72 after losing $9.01 (-2.48%) today, notably underperforming the Nasdaq 100 (1.78%). Today's close at 353.72 marks the lowest recorded closing price since June 16th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 354.86, ASML Holding confirmed its breakout through the prior session low after trading up to $4.12 below it intraday.
Daily Candlestick Chart (ASML as at Jul 31, 2020):
Friday's trading range has been $11.42 (3.16%), that's slightly above the last trading month's daily average range of $9.35. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ASML.
One bearish candlestick pattern matches today's price action, the Black Candle.
The share closed below the 50-day moving average at 361.68 for the first time since April 13th. When this moving average was crossed below the last time on April 13th, ASML actually gained 5.41% on the following trading day. After having been unable to move above 362.82 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 362.16.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 381.93.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for ASML Holding. Out of 126 times, ASML closed higher 61.11% 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 74.60% with an average market move of 4.07%.