iQIYI Inc. (NASDAQ:IQ) shares were trading significantly lower Wednesday as many Chinese companies fell due to fears over COVID-19 variant Omicron. The stock has been falling the past few months and sits near support in a technical pattern.
iQIYI was down 6.5% at $4.38 at time of publication.
See Also: Why Alibaba Shares Are Falling
iQIYI Daily Chart Analysis
- Shares have been falling lower the past few months and are showing condensed highs and lows, forming into what traders call a falling wedge pattern. The stock may make a strong move if either pattern support or resistance can be broken.
- The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue). This indicates bearish sentiment, and each of these moving averages may hold as an area of resistance in the future.
- The Relative Strength Index (RSI) has been falling lower the past couple of weeks and now sits at 25. This shows the stock is in the oversold region and is seeing a strong period of strong selling pressure.
What’s Next For iQIYI?
The stock is falling lower in the wedge pattern and may not see a possible trend change until resistance is broken. Bulls want to see the stock bounce and begin to form higher lows and push past the resistance level. If the price can cross above the resistance level, it shows the stock could be making a long-term trend change.
Bears want to see the stock continue to trade in the pattern it's in. Eventually, bears want to see the stock fall below the pattern support for a further bearish move.
