INCY stuck within tight trading range
Incyte Corporation (INCY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
INCY ended the month -5.01% lower at 98.76 after losing $1.75 (-1.74%) today, significantly underperforming the Nasdaq 100 (1.78%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (INCY as at Jul 31, 2020):
Friday's trading range has been $3.09 (3.08%), that's below the last trading month's daily average range of $3.62. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for INCY. Prices continued to consolidate within a tight trading range between 97.13 and 101.55 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Wednesday, INCY actually gained 2.52% on the following trading day.
Prices are trading close to the key technical support level at 97.90 (S1). After spiking up to 101.15 during the day, the market found resistance at the 50-day moving average at 101.08. Incyte ran into sellers again today around 101.15 for the third trading day in a row after having found sellers at 100.97 in the previous session and at 101.55 two days ago.
Though 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.
Selling could accelerate should prices move below the close-by swing low at 97.13 where further sell stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 50" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Incyte. Out of 39 times, INCY closed higher 74.36% 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 74.36% with an average market move of 4.11%.