NTES finds buyers around 259.34 for the third day in a row
NetEase Inc. (NTES) Technical Analysis Report for Jul 12, 2019 | by Techniquant Editorial Team
NTES ended the week -0.62% lower at 259.87 after losing $3.52 (-1.34%) today, notably underperforming the Nasdaq 100 (0.59%). Closing below Thursday's low at 260.01, NetEase confirmed its breakout through the previous session low after trading up to $0.67 below it intraday.
Daily Candlestick Chart (NTES as at Jul 12, 2019):
Friday's trading range has been $7.76 (2.93%), that's far above the last trading month's daily average range of $5.75. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NTES.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Regardless of a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on June 28th, NTES actually gained 2.71% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The share closed back below the 50-day moving average at 261.33. The market found buyers again today around 259.34 for the third trading day in a row after having found demand at 260.01 in the previous session and at 259.14 two days ago.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the nearby swing low at 254.08 where further sell stops might get triggered.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for NetEase. Out of 139 times, NTES closed higher 54.68% 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 57.55% with an average market move of 1.16%.