NTES stuck within tight trading range
NetEase Inc. (NTES) Technical Analysis Report for Jul 29, 2020 | by Techniquant Editorial Team
NTES ended Wednesday at 452.40 gaining $2.12 (0.47%), underperforming the Nasdaq 100 (1.24%). 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 29, 2020):
Wednesday's trading range has been $8.49 (1.89%), that's below the last trading month's daily average range of $12.84. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NTES. Prices continued to consolidate within a tight trading range between 444.10 and 457.85 where it has been caught now for the last three trading days.
Prices are trading close to the key technical resistance level at 458.85 (R1). After having been unable to move above 457.17 in the prior session, NetEase ran into sellers again around the same price level today, failing to move higher than 457.85.
Though the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the nearby swing low at 444.10 where further sell stops might get activated.
Among the two market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for NetEase. Out of 800 times, NTES closed higher 53.25% 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 53.88% with an average market move of 1.23%.