EWI closes lower for the 2nd day in a row
iShares MSCI Italy Capped ETF (EWI) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EWI finished the month 2.7% higher at 24.73 after tanking $0.55 (-2.18%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 24.88, the market confirmed its breakout through the prior session low after trading up to $0.32 below it intraday.
Daily Candlestick Chart (EWI as at Jul 31, 2020):
Friday's trading range has been $0.84 (3.31%), that's far above the last trading month's daily average range of $0.34. 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 EWI.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on July 13th, EWI actually gained 2.07% on the following trading day.
Prices broke below the key technical support level at 25.19 (now R1), which is likely to act as resistance going forward.
Although the ETF 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 nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for EWI. Out of 224 times, EWI closed higher 58.48% 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 55.36% with an average market move of 0.63%.