VIPS breaks back below 200-day moving average
Vipshop Holdings Limited American Depositary Shares each representing two (VIPS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, VIPS finished Wednesday at 16.69 losing $0.06 (-0.36%), but still slightly outperforming the S&P 500 (-0.46%). Trading $0.38 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (VIPS as at Sep 16, 2020):
Wednesday's trading range has been $0.57 (3.4%), that's below the last trading month's daily average range of $0.83. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for VIPS. Prices continued to consolidate within a tight trading range between 16.08 and 17.15 where it has been caught now for the whole last trading week.
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. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on August 18th, VIPS lost -19.45% on the following trading day.
Vipshop Holdings closed back below the 200-day moving average at 16.71. The share found buyers again today around 16.58 for the third trading day in a row after having found demand at 16.60 in the prior session and at 16.52 two days ago.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might accelerate should prices move below the nearby swing low at 16.08 where further sell stops could get activated. As prices are trading close to September's high at 17.26, upside momentum might speed up should VIPS mark new highs for the month.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Vipshop Holdings. Out of 49 times, VIPS closed higher 57.14% of the time on the next trading day after the market condition occurred.