Good technical signals and a possible breakout for NetEase Inc.

NetEase Inc (NASDAQ:NTES) was identified as a Technical Breakout Setup Pattern by our stockscreener. Such a pattern occurs when we see a pause in a strong uptrend: after a strong rise the stock is consolidating a bit and at some point the trend may be continued. Whether this actually happens can not be predicted of course, but it may be a good idea to keep and eye on NASDAQ:NTES.

Technical analysis of NASDAQ:NTES

ChartMill assigns a proprietary Technical Rating to each stock. The score is computed daily by evaluating various technical indicators and properties. The score ranges from 0 to 10.

Taking everything into account, NTES scores 7 out of 10 in our technical rating. In the last year, NTES was an average performer in the market. There are positive signs in the very recent evolution, but the medium term picture is still mixed.

• Both the short term and long term trends are positive. This is a very positive sign.
• NTES is part of the Entertainment industry. There are 82 other stocks in this industry. NTES outperforms 89% of them.
• Looking at the yearly performance, NTES did better than 90% of all other stocks. However, this overall performance is mostly based on the strong move around 4 months ago.
• NTES is currently trading in the middle of its 52 week range, while the S&P500 Index is trading in the lower part of its yearly range. So NTES is doing better than the market!
• In the last month NTES has a been trading in the 92.35 - 108.77 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

Why is NASDAQ:NTES a setup?

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:NTES this score is currently 7:

Besides having an excellent technical rating, NTES also presents a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 105.65. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 101.33, a Stop Loss order could be placed below this zone.

Trading breakout setups.

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Of course, there are many ways to trade or not trade NASDAQ:NTES and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Our Breakout analyzer lists more breakout setups and is updated daily.