EWU still stuck within tight trading range
iShares MSCI United Kingdom ETF (EWU) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
EWU finished the month 0.12% higher at 25.76 after flat today. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (EWU as at Jun 30, 2020):
Tuesday's trading range has been $0.46 (1.8%), that's slightly above the last trading month's daily average range of $0.46. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EWU. Prices continued to consolidate within a tight trading range between 25.41 and 26.01 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Despite a weak opening the market managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on March 19th, EWU actually lost -2.67% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical support level at 25.37 (S1). After having been unable to move above 25.82 in the prior session, the ETF ran into sellers again around the same price level today, missing to move higher than 25.87.
EWU shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
As prices are trading close to June's low at 25.26, downside momentum could accelerate should the market 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 "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for EWU. Out of 57 times, EWU closed higher 63.16% 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 59.65% with an average market move of 0.59%.