IQ breaks below 20-day moving average for the first time since June 1st
iQIYI Inc. (IQ) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
IQ finished the week -3.48% lower at 22.99 after losing $0.15 (-0.65%) today, significantly underperforming the S&P 500 (1.05%). Trading $0.17 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. 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 Jul 10, 2020):
Friday's trading range has been $0.45 (1.95%), that's far below the last trading month's daily average range of $1.34. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IQ. Prices continued to consolidate within a tight trading range between 22.66 and 23.75 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
The market closed below the 20-day moving average at 23.05 for the first time since June 1st. The share found buyers again today around 22.82 for the third trading day in a row after having found demand at 22.70 in the previous session and at 22.66 two days ago. The last time this happened on June 26th, IQ gained 2.38% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling could accelerate should prices move below the close-by swing low at 22.66 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for iQIYI. Out of 83 times, IQ closed lower 56.63% 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 eight trading days, showing a win rate of 55.42% with an average market move of -0.20%.