NTAP closes above its opening price after recovering from early selling pressure
NetApp Inc. (NTAP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NTAP ended the month -0.16% lower at 44.30 after surging $1.45 (3.38%) today on high volume, notably outperforming the S&P 500 (0.77%). This is the biggest single-day gain in over three weeks. The last time we've seen such an unusually strong single-day gain on June 5th, NTAP gained 1.98% on the following trading day. Trading up to $0.86 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 43.29, the stock confirmed its breakout through the previous session high after trading up to $1.12 above it intraday.
Daily Candlestick Chart (NTAP as at Jul 31, 2020):
Friday's trading range has been $2.36 (5.5%), that's far above the last trading month's daily average range of $1.36. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NTAP.
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 44.07 for the first time since July 23rd. Prices are trading close to the key technical resistance level at 45.05 (R1).
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could speed up should prices move above the close-by swing high at 45.72 where further buy stops might get activated. As prices are trading close to July's high at 46.42, upside momentum could accelerate should NetApp mark new highs for the month.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S2" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for NetApp. Out of 11 times, NTAP closed lower 90.91% 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 54.55% with an average market move of 0.30%.