IQ plunges, losing $2.04 (-8.52%) within a single day on high volume
iQIYI Inc. (IQ) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, IQ finished the week -8.45% lower at 21.89 after tanking $2.04 (-8.52%) today on high volume, significantly underperforming the S&P 500 (-0.9%). This is the biggest single-day loss in over a year. The last time we've seen such an unusually strong single-day loss on December 16, 2019, IQ actually gained 1.06% on the following trading day. Today's close at 21.89 marks the lowest recorded closing price since December 31, 2019. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 23.60, the share confirmed its breakout through the previous session low after trading up to $2.09 below it intraday.
Daily Candlestick Chart (IQ as at Jan 24, 2020):
Friday's trading range has been $2.40 (10.04%), that's far above the last trading month's daily average range of $0.79. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IQ.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 21.39 (S1). The stock closed below the 20-day moving average at 23.18 for the first time since November 21, 2019. After having been unable to move above 24.07 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 23.91.
Though iQIYI is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
With prices trading close to this year's low at 21.50, downside momentum could accelerate should IQ break out to new lows for the year.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for iQIYI. Out of 12 times, IQ closed higher 58.33% 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 58.33% with an average market move of 3.17%.