PDD surges $8.70 (14.5%) after posting weak earnings
Pinduoduo Inc. (PDD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
PDD finished the week 12.07% higher at 68.70 after surging $8.70 (14.5%) today on high volume, notably outperforming the S&P 500 (0.24%) following today's earnings report. This is the biggest single-day gain ever recorded for the market. The last time we've seen such an unusually strong single-day gain on Monday, PDD actually lost -5.07% on the following trading day. Today's close at 68.70 marks the highest recorded closing price ever. The bulls were in full control today, moving the market higher throughout the whole session. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (PDD as at May 22, 2020):
PDD reported earnings of $-0.5 per share before today's market open. With analysts having expected an EPS of $-0.34, Pinduoduo Inc. failed market expectations by -47.1%. The company's last earnings report was released on March 11, 2020, when Pinduoduo Inc. reported earnings of $-0.2 per share surpassing market expectations by 23.1%.
Friday's trading range has been $9.02 (14.41%), that's far above the last trading month's daily average range of $3.36. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for PDD.
One bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical resistance level at 69.50 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 69.50 where further buy stops might get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post weak Earnings Report" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for Pinduoduo. Out of 1 times, PDD closed higher 100.00% 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 100.00% with an average market move of 16.50%.