NTES closes within previous day's range after lackluster session
NetEase Inc. (NTES) Technical Analysis Report for Jul 02, 2020 | by Techniquant Editorial Team
NTES ended Thursday at 430.91 gaining $3.17 (0.74%), slightly outperforming the Nasdaq 100 (0.61%) ahead of tomorrow's Independence Day OBS market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (NTES as at Jul 02, 2020):
Thursday's trading range has been $8.02 (1.84%), that's far below the last trading month's daily average range of $12.60. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for NTES. Prices continued to consolidate within a tight trading range between 425.01 and 437.78 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on June 17th, NTES actually gained 0.47% on the following trading day.
Prices are trading close to the key technical support level at 425.00 (S1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 437.78 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 425.01 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NetEase. Out of 453 times, NTES closed higher 53.64% 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 60.93% with an average market move of 2.03%.