EWG dominated by bears dragging the market lower throughout the day
iShares MSCI Germany ETF (EWG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EWG finished the month 4.21% higher at 28.25 after tanking $0.57 (-1.98%) today on high volume. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EWG as at Jul 31, 2020):
Friday's trading range has been $0.77 (2.67%), that's far above the last trading month's daily average range of $0.38. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EWG.
One bearish candlestick pattern matches today's price action, the Black Candle.
The ETF closed below the 20-day moving average at 28.69 for the first time since July 1st. When this moving average was crossed below the last time on June 24th, EWG actually gained 1.38% on the following trading day. After having been unable to move above 28.85 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 28.81.
Though EWG is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for EWG. Out of 252 times, EWG closed higher 57.54% 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 58.33% with an average market move of 0.43%.