BZUN finds buyers again around 40.80
Baozun Inc. (BZUN) Technical Analysis Report for Oct 09, 2019 | by Techniquant Editorial Team
BZUN finished Wednesday at 42.08 gaining $1.38 (3.39%), significantly outperforming the S&P 500 (0.91%). Trading up to $1.20 lower after the open, Baozun managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (BZUN as at Oct 09, 2019):
Wednesday's trading range has been $1.91 (4.55%), that's slightly below the last trading month's daily average range of $1.97. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BZUN.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving lower in the previous session, the stock managed to close higher but below the prior day's open, forming a bullish Harami Candle. Additionally, three candlestick patterns are matching today's price action, the Bullish Harami Cross Pattern and the Southern Doji which are both known as bullish patterns and one neutral pattern, the Doji.
The share managed to close back above the 200-day moving average at 41.73. After having been unable to move lower than 40.56 in the previous session, the market found buyers again around the same price level today at 40.80. The last time this happened on Monday, BZUN actually lost -7.31% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could accelerate should prices move below the close-by swing low at 40.56 where further sell stops might get triggered. Trading close to August's low at 39.93 we could see further downside momentum if potential sell stops at the level get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Southern Doji" stand out. Its common bullish interpretation has been confirmed for Baozun. Out of 21 times, BZUN closed higher 61.90% 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 66.67% with an average market move of 2.82%.