AGG closes higher for the 4th day in a row
iShares Core U.S. Aggregate Bond (AGG) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, AGG ended the week 0.35% higher at 117.44 after edging higher $0.06 (0.05%) today on low volume ahead of tomorrow's Memorial Day market holiday. Today's close at 117.44 marks the highest recorded closing price since March 9th. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (AGG as at May 22, 2020):
Friday's trading range has been $0.21 (0.18%), that's far below the last trading month's daily average range of $0.32. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AGG.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Black Candle showed up on May 11th, AGG actually gained 0.26% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Further buying could move prices higher should the market test April's close-by high at 117.62.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for iShares Core. Out of 84 times, AGG closed higher 61.90% 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 58.33% with an average market move of 0.15%.