AGG stuck within tight trading range
iShares Core U.S. Aggregate Bond (AGG) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
AGG finished Wednesday at 118.33 losing $0.06 (-0.05%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AGG as at Sep 16, 2020):
Wednesday's trading range has been $0.33 (0.28%), that's slightly above the last trading month's daily average range of $0.29. 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 slightly lower than usual for AGG. Prices continued to consolidate within a tight trading range between 118.20 and 118.53 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on August 27th, AGG actually gained 0.14% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Black Candle and the Dark Cloud Cover which are both known as bearish patterns.
The ETF closed back below the 20-day moving average at 118.37 for the first time since September 10th.
While 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 118.02 where further sell stops could get activated. Further selling might move prices lower should the market test August's nearby low at 117.95.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Dark Cloud Cover" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for iShares Core. Out of 11 times, AGG closed higher 54.55% 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 63.64% with an average market move of 0.32%.