EWG finds buyers again around 27.76
iShares MSCI Germany ETF (EWG) Technical Analysis Report for Jul 13, 2020 | by Techniquant Editorial Team
EWG ended Monday at 27.83 losing $0.23 (-0.82%) 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 (EWG as at Jul 13, 2020):
Monday's trading range has been $0.70 (2.48%), that's far above the last trading month's daily average range of $0.47. 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 slightly lower than usual for EWG. Prices continued to consolidate within a tight trading range between 27.54 and 28.46 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Bearish Hikkake Pattern, the Black Candle and the Dark Cloud Cover which are known as bearish patterns. The last time a Bearish Hikkake Pattern showed up on July 2nd, EWG actually gained 2.25% on the following trading day.
After having been unable to move lower than 27.72 in the prior session, the market found buyers again around the same price level today at 27.76.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling could speed up should prices move below the nearby swing low at 27.54 where further sell stops might get triggered. As prices are trading close to July's low at 26.94, downside momentum could accelerate should the ETF mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for EWG. Out of 297 times, EWG closed higher 56.90% 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 58.59% with an average market move of 0.55%.