IQ finds buyers at key support level
iQIYI Inc. (IQ) Technical Analysis Report for Jun 25, 2019 | by Techniquant Editorial Team
IQ ended Tuesday at 18.01 losing $0.39 (-2.12%), notably underperforming the S&P 500 (-0.95%). Closing below Monday's low at 18.20, the share confirmed its breakout through the previous session low after trading up to $0.54 below it intraday.
Daily Candlestick Chart (IQ as at Jun 25, 2019):
Tuesday's trading range has been $0.66 (3.61%), that's slightly above the last trading month's daily average range of $0.62. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently just the same than usual for IQ.
After trading down to 17.66 earlier during the day, iQIYI bounced off the key technical support level at 17.87 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on June 21st, IQ gained 1.38% on the following trading day. The market closed back below the 20-day moving average at 18.22.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 18.55 where further buy stops could get activated. As prices are trading close to June's low at 17.18, downside momentum might accelerate should the stock mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bearish for iQIYI. Out of 82 times, IQ closed lower 56.10% 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 69.51% with an average market move of -3.66%.