IQ finds buyers at key support level
iQIYI Inc. (IQ) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
IQ finished the month 39.78% higher at 23.19 after losing $0.07 (-0.3%) today, notably underperforming the S&P 500 (1.54%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (IQ as at Jun 30, 2020):
Tuesday's trading range has been $0.58 (2.47%), that's below the last trading month's daily average range of $1.27. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for IQ. Prices continued to consolidate within a tight trading range between 21.92 and 23.53 where it has been caught now for the whole last trading week.
After trading down to 22.95 earlier during the day, iQIYI bounced off the key technical support level at 23.15 (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 16th, IQ gained 2.61% on the following trading day. After having been unable to move above 23.50 in the prior session, the share ran into sellers again around the same price level today, failing to move higher than 23.53.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the close-by swing low at 21.92 where further sell stops could get triggered.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Its common bearish interpretation has been confirmed for iQIYI. Out of 124 times, IQ closed lower 56.45% 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 four trading days, showing a win rate of 57.26% with an average market move of -0.24%.