SE closes within prior day's range after lackluster session
Sea Limited American Depositary Shares each representing one Class A (SE) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
SE ended Wednesday at 147.58 losing $2.41 (-1.61%) on low volume, notably underperforming the S&P 500 (-0.46%). Trading $2.28 higher after the open, the share 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 missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (SE as at Sep 16, 2020):
Wednesday's trading range has been $4.51 (3.03%), that's far below the last trading month's daily average range of $7.53. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for SE. Prices continued to consolidate within a tight trading range between 143.00 and 151.24 where it has been caught now for the last three trading days.
Prices are trading close to the key technical support level at 145.76 (S1). The stock closed back below the 20-day moving average at 149.40. When this moving average was crossed below the last time on September 4th, SE lost -4.27% on the following trading day. After having been unable to move above 150.59 in the previous session, the market ran into sellers again around the same price level today, missing to move higher than 151.24.
Although Sea 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 five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Sea. Out of 123 times, SE closed higher 57.72% 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 65.04% with an average market move of 4.36%.