NTES closes above its opening price after recovering from early selling pressure
NetEase Inc. (NTES) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
NTES ended the month 6.76% higher at 458.42 after gaining $7.20 (1.6%) today, slightly underperforming the Nasdaq 100 (1.78%). Trading up to $3.28 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 454.66, the share confirmed its breakout through the previous session high after trading up to $4.89 above it intraday.
Daily Candlestick Chart (NTES as at Jul 31, 2020):
Friday's trading range has been $8.89 (1.96%), that's below the last trading month's daily average range of $12.87. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NTES.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a Bullish Short Candle showed up on July 17th, NTES gained 2.98% on the following trading day.
Buyers managed to take out the key technical resistance level at 457.85 (now S1), which is likely to act as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 448.03 where further sell stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for NetEase. Out of 70 times, NTES closed higher 60.00% 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 55.71% with an average market move of 0.60%.