EWJ closes within prior day's range after lackluster session
iShares MSCI Japan ETF (EWJ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EWJ ended the week 1.86% higher at 52.67 after edging higher $0.07 (0.13%) today on low volume ahead of tomorrow's Memorial Day market holiday. Trading up to $0.13 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 15th, EWJ gained 2.49% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EWJ as at May 22, 2020):
Friday's trading range has been $0.24 (0.46%), that's far below the last trading month's daily average range of $0.52. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EWJ.
Prices are trading close to the key technical resistance level at 52.92 (R1). After having been unable to move lower than 52.47 in the previous session, the market found buyers again around the same price level today at 52.44.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the close-by swing high at 53.55 where further buy stops might get triggered. Trading close to March's high at 54.12 we could see further upside momentum if potential buy stops at the level get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Its common bullish interpretation has been confirmed for EWJ. Out of 452 times, EWJ closed higher 49.78% 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 57.30% with an average market move of 0.12%.