AAXJ slips to lowest close since January 23rd
iShares MSCI All Country Asia ex Japan Index Fund (AAXJ) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, AAXJ ended the week -3.48% lower at 66.38 after losing $1.19 (-1.76%) today on high volume. Today's close at 66.38 marks the lowest recorded closing price since January 23rd. Trading $0.37 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (AAXJ as at May 17, 2019):
Friday's trading range has been $0.56 (0.84%), that's slightly below the last trading month's daily average range of $0.68. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for AAXJ.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on May 2nd, AAXJ actually gained 1.19% on the following trading day.
Unable to break through the key technical resistance level at 66.74 (R1), the ETF closed below it after spiking up to 66.79 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling might speed up should prices move below the close-by swing low at 66.13 where further sell stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for iShares MSCI. Out of 300 times, AAXJ closed higher 56.00% 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 56.33% with an average market move of 0.42%.