XRX breaks back below 20-day moving average
Xerox Corporation (XRX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
XRX ended the week 14.04% higher at 16.98 after losing $0.26 (-1.51%) today on low volume, significantly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 17.02, Xerox confirmed its breakout through the previous session low after trading up to $0.28 below it intraday.
Daily Candlestick Chart (XRX as at May 22, 2020):
Friday's trading range has been $0.64 (3.71%), that's far below the last trading month's daily average range of $0.99. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for XRX.
Regardless of a strong opening the share closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on April 28th, XRX actually gained 8.74% on the following trading day.
After trading down to 16.74 earlier during the day, the market bounced off the key technical support level at 16.80 (S1). The failure to close below the support could increase that levels importance as support going forward. The stock closed back below the 20-day moving average at 17.10.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 18.05 where further buy stops could get triggered. As prices are trading close to May's high at 18.27, upside momentum might speed up should XRX mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Xerox. Out of 457 times, XRX closed higher 57.11% 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 six trading days, showing a win rate of 54.05% with an average market move of 0.00%.