EWW dominated by bears dragging the market lower throughout the day
iShares MSCI Mexico Capped ETF (EWW) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
EWW ended the week -1.75% lower at 48.71 after gaining $0.19 (0.39%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (EWW as at Oct 12, 2018):
Friday's trading range has been $1.19 (2.4%), that's far above the last trading month's daily average range of $0.77. 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 EWW.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 48.32 earlier during the day, the market bounced off the key technical support level at 48.40 (S1). The failure to close below the support might increase that levels significance as support going forward. Prices are trading close to the key technical resistance level at 49.33 (R1). After having been unable to move lower than 48.28 in the previous session, the ETF found buyers again around the same price level today at 48.32.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 50.31. The last time this happened on August 16th, EWW gained 1.14% on the following trading day.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the nearby swing high at 49.55 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 48.28 where further sell stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the lower Bollinger Band" stand out. Its common bullish interpretation has been confirmed for EWW. Out of 70 times, EWW closed higher 57.14% 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 58.57% with an average market move of 1.10%.