PYPL breaks below Thursday's low
PayPal Holdings Inc. (PYPL) Technical Analysis Report for Jul 06, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PYPL ended Monday at 176.18 edging lower $1.03 (-0.58%), significantly underperforming the Nasdaq 100 (2.54%). Closing below Thursday's low at 176.72, the stock confirmed its breakout through the previous session low after trading up to $2.26 below it intraday.
Daily Candlestick Chart (PYPL as at Jul 06, 2020):
Monday's trading range has been $6.77 (3.76%), that's far above the last trading month's daily average range of $5.10. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PYPL.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on June 19th, PYPL actually gained 3.59% on the following trading day. In spite of a strong opening the share closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 174.46 earlier during the day, PayPal Holdings bounced off the key technical support level at 175.40 (S1). The failure to close below the support could increase that levels importance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for PayPal Holdings. Out of 180 times, PYPL closed higher 57.22% 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 71.67% with an average market move of 2.58%.