NTES closes above its opening price after recovering from early selling pressure
NetEase Inc. (NTES) Technical Analysis Report for Jul 27, 2020 | by Techniquant Editorial Team
NTES finished Monday at 451.91 gaining $3.58 (0.8%), strongly underperforming the Nasdaq 100 (1.82%). Trading up to $3.03 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (NTES as at Jul 27, 2020):
Monday's trading range has been $6.13 (1.36%), that's far below the last trading month's daily average range of $12.71. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NTES.
Two candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and one neutral pattern, the Doji. The last time a Southern Doji showed up on December 17, 2019, NTES actually lost -0.97% on the following trading day.
Prices are trading close to the key technical support level at 446.58 (S1).
Although the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Doji" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for NetEase. Out of 144 times, NTES closed higher 55.56% 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 56.94% with an average market move of 1.44%.