PYPL closes below its opening price unable to hold early session gains
PayPal Holdings Inc. (PYPL) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
PYPL finished Monday at 154.53 losing $0.48 (-0.31%), underperforming the Nasdaq 100 (0.45%). Trading $1.07 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (PYPL as at Jun 01, 2020):
Monday's trading range has been $2.92 (1.89%), that's below the last trading month's daily average range of $4.61. 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 lower than usual for PYPL.
After moving higher in the previous session, PayPal Holdings closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on March 31st, PYPL lost -4.55% on the following trading day.
Prices broke below the key technical support level at 154.55 (now R1), which is likely to act as resistance going forward. After having been unable to move above 155.33 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 155.97.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for PayPal Holdings. Out of 279 times, PYPL closed higher 57.71% 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 62.72% with an average market move of 1.18%.