PYPL declines to lowest close since July 28th
PayPal Holdings Inc. (PYPL) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, PYPL ended Wednesday at 180.91 losing $5.11 (-2.75%), significantly underperforming the Nasdaq 100 (-1.67%). Today's close at 180.91 marks the lowest recorded closing price since July 28th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 184.18, the stock confirmed its breakout through the prior session low after trading up to $3.51 below it intraday.
Daily Candlestick Chart (PYPL as at Sep 16, 2020):
Wednesday's trading range has been $8.65 (4.62%), that's slightly above the last trading month's daily average range of $7.02. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for PYPL.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 181.24 (now R1), which is likely to act as resistance going forward. The last time this happened on September 4th, PYPL lost -3.07% on the following trading day. After having been unable to move above 190.45 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 189.32.
Although PayPal Holdings is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the nine 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. Though it is usually interpreted as bearish, it has actually shown to be bullish for PayPal Holdings. Out of 191 times, PYPL closed higher 57.07% 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 72.25% with an average market move of 2.73%.