EEM stuck within tight trading range
iShares MSCI Emerging Markets ETF (EEM) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
EEM ended the month 5.99% higher at 39.99 after losing $0.13 (-0.32%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EEM as at Jun 30, 2020):
Tuesday's trading range has been $0.35 (0.87%), that's below the last trading month's daily average range of $0.59. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for EEM. Prices continued to consolidate within a tight trading range between 39.72 and 40.33 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical resistance level at 40.27 (R1). The market found buyers again today around 39.74 for the third trading day in a row after having found demand at 39.72 in the previous session and at 39.77 two days ago. The last time this happened on June 19th, EEM gained 1.23% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling could accelerate should prices move below the nearby swing low at 39.72 where further sell stops might get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for EEM ETF. Out of 50 times, EEM closed lower 58.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 66.00% with an average market move of -1.18%.