ZTO breaks below key technical support level
ZTO Express Inc. American Depositary Shares each representing one Class A. (ZTO) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
ZTO finished the month 12.54% higher at 36.71 after losing $0.39 (-1.05%) today, notably underperforming the S&P 500 (1.54%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ZTO as at Jun 30, 2020):
Tuesday's trading range has been $1.40 (3.76%), that's slightly above the last trading month's daily average range of $1.37. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ZTO.
Prices broke below the key technical support level at 36.81 (now R1), which is likely to act as resistance going forward. The last time this happened on June 22nd, ZTO actually gained 0.46% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 37.90 where further buy stops could get triggered. With prices trading close to this year's high at 38.67, upside momentum might accelerate should the stock be able to break out to new highs for the year.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for ZTO Express. Out of 87 times, ZTO closed higher 51.72% 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 66.67% with an average market move of 2.11%.