EFA closes above its opening price after recovering from early selling pressure
iShares MSCI EAFE ETF (EFA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EFA finished the week 3.25% higher at 56.95 after losing $0.16 (-0.28%) today ahead of tomorrow's Memorial Day market holiday. Trading up to $0.24 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 15th, EFA gained 4.04% on the following trading day. 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 (EFA as at May 22, 2020):
Friday's trading range has been $0.40 (0.7%), that's far below the last trading month's daily average range of $0.70. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EFA.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 58.06 where further buy stops might get activated.
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. Although it is usually interpreted as bearish, it has actually shown to be bullish for EAFE ETF. Out of 293 times, EFA closed higher 56.31% 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 55.63% with an average market move of 0.39%.