EWC closes within previous day's range after lackluster session
iShares MSCI Canada ETF (EWC) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EWC finished the week 2.78% higher at 24.39 after flat today ahead of tomorrow's Memorial Day market holiday. Trading up to $0.20 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EWC as at May 22, 2020):
Friday's trading range has been $0.28 (1.15%), that's below the last trading month's daily average range of $0.45. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EWC.
One bearish candlestick pattern matches today's price action, the Hanging Man.
After trading as low as 24.13 during the day, the ETF found support at the 20-day moving average at 24.20. After having been unable to move lower than 24.20 in the previous session, EWC found buyers again around the same price level today at 24.13. The last time this happened on Tuesday, EWC gained 1.15% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the close-by swing high at 24.81 where further buy stops might get triggered. Further buying could move prices higher should the market test April's nearby high at 25.17.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for EWC. Out of 82 times, EWC closed higher 62.20% 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 three trading days, showing a win rate of 54.88% with an average market move of 0.10%.