NTES plunges, losing $29.51 (-7.35%) within a single day on high volume
NetEase Inc. (NTES) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NTES ended the week -0.58% lower at 372.25 after tanking $29.51 (-7.35%) today on high volume, significantly underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. This is the biggest single-day loss in over two months.
Daily Candlestick Chart (NTES as at May 22, 2020):
Friday's trading range has been $19.85 (5.16%), that's far above the last trading month's daily average range of $12.00. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for NTES.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 363.95 (S1).
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 361.51. The last time this happened on Wednesday, NTES actually gained 2.93% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 358.86 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for NetEase. Out of 120 times, NTES closed higher 65.00% 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 61.67% with an average market move of 1.76%.