NTES breaks below key technical support level
NetEase Inc. (NTES) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NTES finished Tuesday at 265.74 losing $4.80 (-1.77%), significantly underperforming the Nasdaq 100 (0.34%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 267.61, NetEase confirmed its breakout through the prior session low after trading up to $2.71 below it intraday.
Daily Candlestick Chart (NTES as at Apr 16, 2019):
Tuesday's trading range has been $7.97 (2.93%), that's slightly above the last trading month's daily average range of $6.78. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for NTES.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 269.04 (now R1), which is likely to act as resistance going forward. The last time this happened on March 22nd, NTES actually gained 0.60% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NetEase. Out of 295 times, NTES closed higher 54.92% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 57.97% with an average market move of 1.47%.