XRX closes above its opening price after recovering from early selling pressure
Xerox Corporation (XRX) Technical Analysis Report for Jul 27, 2020 | by Techniquant Editorial Team
XRX finished Monday at 15.82 gaining $0.17 (1.09%), slightly outperforming the S&P 500 (0.74%) ahead of Tuesday's earnings report. Trading up to $0.38 lower after the open, Xerox managed to reverse during the session as bulls took control ending the day above 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 (XRX as at Jul 27, 2020):
XRX is set to report earnings before tomorrow's market open. For the upcoming report, analysts expect the company to have earned $0.25 per share. The company's last earnings report was released on April 28, 2020, when Xerox Corporation reported earnings of $0.21 per share missing market expectations by -52.3%.
Monday's trading range has been $0.51 (3.25%), that's far below the last trading month's daily average range of $0.69. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XRX.
After moving lower in the prior session, the stock managed to close higher but below the previous day's open, forming a bullish Harami Candle. The last time this candlestick pattern showed up on July 8th, XRX actually lost -5.12% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the Hammer.
Prices are trading close to the key technical resistance level at 16.01 (R1).
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
With prices trading close to this year's low at 14.22, downside momentum might accelerate should the share break out to new lows for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hammer" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Xerox. Out of 26 times, XRX closed lower 61.54% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 61.54% with an average market move of -2.30%.