IQ closes below its opening price unable to hold early session gains
iQIYI Inc. (IQ) Technical Analysis Report for Jul 11, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, IQ finished Thursday at 19.57 losing $0.34 (-1.71%), strongly underperforming the S&P 500 (0.23%). Trading $0.33 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Wednesday's low at 19.72, the share confirmed its breakout through the previous session low after trading up to $0.20 below it intraday.
Daily Candlestick Chart (IQ as at Jul 11, 2019):
Thursday's trading range has been $0.77 (3.86%), that's slightly above the last trading month's daily average range of $0.76. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently just the same than usual for IQ.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on July 1st, IQ actually gained 2.22% on the following trading day.
After having been unable to move above 20.36 in the prior session, the stock ran into sellers again around the same price level today, failing to move higher than 20.29.
While iQIYI is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 20.36 where further buy 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 "Down Close Near Low of Period" stand out. Its common bearish interpretation has been confirmed for iQIYI. Out of 42 times, IQ closed lower 54.76% 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 76.19% with an average market move of -2.59%.