NTES breaks back above 20-day moving average
NetEase Inc. (NTES) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
NTES ended Thursday at 317.94 gaining $10.04 (3.26%) on low volume, strongly underperforming the Nasdaq 100 (5.72%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (NTES as at Mar 26, 2020):
Thursday's trading range has been $11.54 (3.68%), that's far below the last trading month's daily average range of $18.53. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for NTES. Prices continued to consolidate within a tight trading range between 303.03 and 328.00 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
NetEase managed to close back above the 20-day moving average at 311.20. When this moving average was crossed above the last time on Tuesday, NTES actually lost -4.92% on the following trading day. Prices are trading close to the key technical resistance level at 325.00 (R1). After having been unable to move above 326.71 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 323.61.
The share shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying could speed up should prices move above the close-by swing high at 328.00 where further buy stops might get triggered.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for NetEase. Out of 139 times, NTES closed higher 51.08% 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 64.03% with an average market move of 1.45%.