BZUN breaks below 100-day moving average for the first time since June 1st
Baozun Inc. (BZUN) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, BZUN finished Wednesday at 36.48 losing $0.55 (-1.49%), notably underperforming the S&P 500 (-0.46%). Today's close at 36.48 marks the lowest recorded closing price since June 16th. Trading $0.66 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 11th, BZUN actually gained 2.42% on the following trading day. Closing below Tuesday's low at 36.62, the share confirmed its breakout through the prior session low after trading up to $0.37 below it intraday.
Daily Candlestick Chart (BZUN as at Sep 16, 2020):
Wednesday's trading range has been $1.32 (3.58%), that's far below the last trading month's daily average range of $2.16. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for BZUN.
Baozun closed below the 100-day moving average at 36.88 for the first time since June 1st.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could speed up should prices move above the nearby swing high at 38.24 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 36.22 where further sell stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Baozun. Out of 213 times, BZUN closed higher 54.46% 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 56.81% with an average market move of 2.80%.