XRX breaks back below 50-day moving average
Xerox Corporation (XRX) Technical Analysis Report for Aug 03, 2020 | by Techniquant Editorial Team
XRX finished Monday at 16.01 losing $0.64 (-3.84%), significantly underperforming the S&P 500 (0.72%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (XRX as at Aug 03, 2020):
Monday's trading range has been $0.75 (4.52%), that's slightly below the last trading month's daily average range of $0.82. 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.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on July 28th, XRX actually gained 4.27% on the following trading day.
The share closed back below the 50-day moving average at 16.54. Xerox ran into sellers again today around 16.60 for the third trading day in a row after having found sellers at 16.68 in the previous session and at 16.58 two days ago.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying might accelerate should prices move above the nearby swing high at 16.68 where further buy stops could get triggered. With prices trading close to this year's low at 14.22, downside momentum might speed up should the market break out to new lows for the year. Further selling could move prices lower should the market test July's close-by low at 14.51.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Xerox. Out of 98 times, XRX closed higher 58.16% 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 two trading days, showing a win rate of 59.18% with an average market move of 0.10%.