NTES runs into sellers again around 457.17
NetEase Inc. (NTES) Technical Analysis Report for Jul 28, 2020 | by Techniquant Editorial Team
NTES ended Tuesday at 450.28 losing $1.63 (-0.36%) on low volume, but still outperforming the Nasdaq 100 (-1.33%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (NTES as at Jul 28, 2020):
Tuesday's trading range has been $13.07 (2.94%), that's slightly above the last trading month's daily average range of $12.97. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NTES.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on May 29th, NTES gained 3.84% on the following trading day.
After spiking up to 457.17 during the day, the market found resistance at the 20-day moving average at 457.05. After having been unable to move above 455.23 in the prior session, the stock ran into sellers again around the same price level today, failing to move higher than 457.17.
Although 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.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NetEase. Out of 55 times, NTES closed higher 54.55% 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 50.91% with an average market move of 1.26%.