BIDU still stuck within tight trading range
Baidu Inc. (BIDU) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
BIDU ended the month -0.41% lower at 119.40 after gaining $1.40 (1.19%) today, underperforming the Nasdaq 100 (1.78%). Trading up to $2.16 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 119.17, the stock confirmed its breakout through the prior session high after trading up to $0.86 above it intraday.
Daily Candlestick Chart (BIDU as at Jul 31, 2020):
Friday's trading range has been $3.33 (2.8%), that's slightly above the last trading month's daily average range of $3.29. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BIDU. Prices continued to consolidate within a tight trading range between 114.75 and 120.45 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top and the Takuri Line which are both known as bullish patterns. The last time a Takuri Line showed up on March 17th, BIDU actually lost -8.24% on the following trading day.
Baidu managed to close back above the 50-day moving average at 119.19. Prices are trading close to the key technical resistance level at 120.12 (R1).
Though the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the close-by swing high at 120.45 where further buy stops might get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed above last periods high" stand out. Its common bullish interpretation has been confirmed for Baidu. Out of 378 times, BIDU closed higher 53.70% 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 57.94% with an average market move of 0.88%.