EWH breaks back below 50-day moving average
iShares MSCI Hong Kong ETF (EWH) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EWH ended the week -4.33% lower at 19.66 after tanking $1.06 (-5.12%) today on high volume ahead of tomorrow's Memorial Day market holiday. This is the biggest single-day loss in over two months. Today's close at 19.66 marks the lowest recorded closing price since April 1st.
Daily Candlestick Chart (EWH as at May 22, 2020):
Friday's trading range has been $0.27 (1.36%), that's slightly below the last trading month's daily average range of $0.27. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EWH.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 19.39 (S1). The market closed back below the 50-day moving average at 20.60 for the first time since May 15th. When this moving average was crossed below the last time on May 15th, EWH actually gained 3.65% on the following trading day.
Crossing below the lower Bollinger Band for the first time since March 19th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 21.01 or signal the beginning of a strong momentum breakout leading to even lower prices.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Further selling might move prices lower should the market test April's close-by low at 19.28.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for EWH. Out of 90 times, EWH closed higher 56.67% of the time on the next trading day after the market condition occurred.