BZUN closes above its opening price after recovering from early selling pressure
Baozun Inc. (BZUN) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 5th day in a row, BZUN finished the month 9.39% higher at 42.06 after gaining $1.54 (3.8%) today, significantly outperforming the S&P 500 (0.77%). Trading up to $0.50 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (BZUN as at Jul 31, 2020):
Friday's trading range has been $1.35 (3.27%), that's below the last trading month's daily average range of $1.91. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for BZUN.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Baozun managed to close above the 20-day moving average at 41.39 for the first time since July 14th. When this moving average was crossed above the last time on June 1st, BZUN gained 10.70% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "5 Consecutive Higher Closes" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Baozun. Out of 19 times, BZUN closed lower 73.68% 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 10 trading days, showing a win rate of 63.16% with an average market move of -1.67%.