EWU finds buyers at key support level
iShares MSCI United Kingdom ETF (EWU) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, EWU ended the week 0.89% higher at 32.92 after losing $0.15 (-0.45%) today ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EWU as at Feb 14, 2020):
Friday's trading range has been $0.19 (0.58%), that's slightly below the last trading month's daily average range of $0.20. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EWU.
After trading down to 32.81 earlier during the day, the ETF bounced off the key technical support level at 32.90 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Tuesday, EWU gained 0.76% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 32.62 where further sell stops might get triggered. With prices trading close to this year's low at 32.39, downside momentum could speed up should the market break out to new lows for the year.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for EWU. Out of 382 times, EWU closed higher 61.26% 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 55.76% with an average market move of 0.31%.