EEM closes lower for the 2nd day in a row
iShares MSCI Emerging Markets ETF (EEM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EEM finished the month 8.25% higher at 43.29 after losing $0.30 (-0.69%) today on high volume. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EEM as at Jul 31, 2020):
Friday's trading range has been $0.68 (1.56%), that's above the last trading month's daily average range of $0.52. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for EEM.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Tuesday, EEM actually gained 1.61% on the following trading day.
After trading as low as 42.96 during the day, EEM ETF found support at the 20-day moving average at 43.27.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 42.63 where further sell stops could get triggered.
Among the four 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 EEM ETF. Out of 309 times, EEM closed higher 55.66% 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 56.31% with an average market move of 0.14%.