XRX finds buyers at key support level
Xerox Corporation (XRX) Technical Analysis Report for Jul 28, 2020 | by Techniquant Editorial Team
XRX finished Tuesday at 15.21 losing $0.61 (-3.86%), significantly underperforming the S&P 500 (-0.65%) following today's earnings report. Closing below Monday's low at 15.31, Xerox confirmed its breakout through the previous session low after trading up to $0.27 below it intraday.
Daily Candlestick Chart (XRX as at Jul 28, 2020):
XRX reported earnings of $0.15 per share before today's market open. With analysts having expected an EPS of $0.12, Xerox Corporation surpassed market expectations by 25.0%. The company's last earnings report was released on April 28, 2020, when Xerox Corporation reported earnings of $0.21 per share failing market expectations by -52.3%.
Tuesday's trading range has been $1.34 (8.36%), that's far above the last trading month's daily average range of $0.72. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XRX.
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, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on July 9th, XRX gained 5.88% on the following trading day.
After trading down to 15.04 earlier during the day, the share bounced off the key technical support level at 15.05 (S1). The failure to close below the support could increase that levels importance as support going forward. After spiking up to 16.38 during the day, the stock found resistance at the 20-day moving average at 16.04.
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 XRX break out to new lows for the year. As prices are trading close to July's low at 14.51, downside momentum could speed up should Xerox mark new lows 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. Its common bearish interpretation has been confirmed for Xerox. Out of 44 times, XRX closed lower 56.82% 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 59.09% with an average market move of -1.72%.