EWJ dominated by bears dragging the market lower throughout the day
iShares MSCI Japan ETF (EWJ) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, EWJ finished the week -1.72% lower at 58.45 after losing $0.44 (-0.75%) today ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session.
Daily Candlestick Chart (EWJ as at Feb 14, 2020):
Friday's trading range has been $0.25 (0.43%), that's below the last trading month's daily average range of $0.31. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EWJ.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on February 7th, EWJ lost -0.12% on the following trading day.
Prices are trading close to the key technical support level at 58.19 (S1).
The ETF shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
With prices trading close to this year's low at 57.56, downside momentum could accelerate should the market break out to new lows for the year. As prices are trading close to February's low at 58.16, downside momentum might speed up should EWJ mark new lows for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for EWJ. Out of 435 times, EWJ closed higher 59.77% 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 59.54% with an average market move of 0.43%.