XRX unable to break through key resistance level
Xerox Corporation (XRX) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, XRX finished Tuesday at 15.68 losing $0.33 (-2.06%), notably underperforming the S&P 500 (0.36%). Trading $0.40 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 below Monday's low at 15.85, the share confirmed its breakout through the previous session low after trading up to $0.25 below it intraday.
Daily Candlestick Chart (XRX as at Aug 04, 2020):
Tuesday's trading range has been $0.81 (5.06%), that's slightly below the last trading month's daily average range of $0.82. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for XRX.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern.
Unable to break through the key technical resistance level at 16.02 (R1), Xerox closed below it after spiking up to 16.41 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on July 23rd, XRX lost -6.90% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 14.82 where further sell stops could get triggered. With prices trading close to this year's low at 14.22, downside momentum might accelerate should the market break out to new lows for the year. Further selling could move prices lower should the market test July's nearby low at 14.51.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Xerox. Out of 475 times, XRX closed higher 55.37% 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 10 trading days, showing a win rate of 57.68% with an average market move of 0.44%.