IQ closes above its opening price after recovering from early selling pressure
iQIYI Inc. (IQ) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
IQ ended Wednesday at 22.75 gaining $0.49 (2.2%), strongly outperforming the S&P 500 (-0.46%). Today's close at 22.75 marks the highest recorded closing price since August 6th. Trading up to $0.35 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Tuesday's high at 22.51, the share confirmed its breakout through the previous session high after trading up to $0.40 above it intraday.
Daily Candlestick Chart (IQ as at Sep 16, 2020):
Wednesday's trading range has been $0.89 (3.98%), that's slightly above the last trading month's daily average range of $0.84. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IQ.
Unable to break through the key technical resistance level at 22.87 (R1), the stock closed below it after spiking up to 22.91 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on September 9th, IQ actually gained 1.52% on the following trading day.
IQIYI shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Further buying could move prices higher should the market test August's close-by high at 23.04.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for iQIYI. Out of 96 times, IQ closed lower 53.13% 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 58.33% with an average market move of -0.36%.