IQ breaks back above 50-day moving average
iQIYI Inc. (IQ) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
IQ ended the month -9.01% lower at 21.10 after gaining $0.44 (2.13%) today, notably outperforming the S&P 500 (0.77%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (IQ as at Jul 31, 2020):
Friday's trading range has been $0.60 (2.89%), that's slightly below the last trading month's daily average range of $0.83. 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 20.14 and 21.24 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the White Candle.
The market managed to close back above the 50-day moving average at 20.88. When this moving average was crossed above the last time on Wednesday, IQ actually lost -0.43% on the following trading day. After having been unable to move above 21.16 in the previous session, the stock ran into sellers again around the same price level today, failing to move higher than 21.24.
Though the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the close-by swing low at 20.31 where further sell stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 50" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for iQIYI. Out of 19 times, IQ closed lower 73.68% 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 57.89% with an average market move of -1.11%.