NTES closes above its opening price after recovering from early selling pressure
NetEase Inc. (NTES) Technical Analysis Report for Jul 24, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, NTES finished the week -1.96% lower at 448.33 after losing $7.09 (-1.56%) today, underperforming the Nasdaq 100 (-0.92%). Trading up to $7.43 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 8th, NTES gained 6.31% on the following trading day.
Daily Candlestick Chart (NTES as at Jul 24, 2020):
Friday's trading range has been $14.67 (3.32%), that's slightly above the last trading month's daily average range of $12.83. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NTES.
The share closed below the 20-day moving average at 455.47 for the first time since May 6th.
While NetEase is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
As prices are trading close to July's low at 425.01, downside momentum could speed up should the stock mark new lows for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Gap Down" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NetEase. Out of 66 times, NTES closed higher 57.58% 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 59.09% with an average market move of 2.01%.