EWA stuck within tight trading range
iShares MSCI Australia ETF (EWA) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, EWA finished Wednesday at 20.50 edging higher $0.02 (0.1%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EWA as at Sep 16, 2020):
Wednesday's trading range has been $0.26 (1.26%), that's slightly above the last trading month's daily average range of $0.25. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EWA. Prices continued to consolidate within a tight trading range between 20.30 and 20.70 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 July 13th, EWA actually gained 1.50% on the following trading day.
Prices are trading close to the key technical resistance level at 20.53 (R1). After having been unable to move lower than 20.45 in the prior session, the market found buyers again around the same price level today at 20.44.
While the ETF is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Higher Closes" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EWA. Out of 79 times, EWA closed lower 62.03% 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 50.63% with an average market move of -0.25%.