EWI finds buyers around 20.66 for the third day in a row
iShares MSCI Italy Capped ETF (EWI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EWI ended the week 4.41% higher at 20.84 after gaining $0.16 (0.77%) today ahead of tomorrow's Memorial Day market holiday. Trading up to $0.13 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 prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EWI as at May 22, 2020):
Friday's trading range has been $0.22 (1.06%), that's far below the last trading month's daily average range of $0.36. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EWI. Prices continued to consolidate within a tight trading range between 20.60 and 20.93 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 20.48 (S1). The ETF found buyers again today around 20.66 for the third trading day in a row after having found demand at 20.60 in the previous session and at 20.62 two days ago. The last time this happened on March 3rd, EWI gained 3.52% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might speed up should prices move above the nearby swing high at 20.93 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 20.60 where further sell stops could get activated. Further buying might move prices higher should the market test April's nearby high at 21.69.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. Its common bearish interpretation has been confirmed for EWI. Out of 65 times, EWI closed lower 58.46% 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 50.77% with an average market move of -0.16%.