EWW stuck within tight trading range
iShares MSCI Mexico Capped ETF (EWW) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
EWW finished the week 3.2% higher at 47.71 after edging higher $0.16 (0.34%) today on low volume ahead of tomorrow's Presidents' Day market holiday. Closing above Thursday's high at 47.68, the ETF confirmed its breakout through the prior session high after trading up to $0.12 above it intraday.
Daily Candlestick Chart (EWW as at Feb 14, 2020):
Friday's trading range has been $0.31 (0.65%), that's far below the last trading month's daily average range of $0.72. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EWW. Prices continued to consolidate within a tight trading range between 47.15 and 48.06 where it has been caught now for the last three trading days.
After trading down to 47.49 earlier during the day, the market bounced off the key technical support level at 47.54 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on February 7th, EWW actually lost -0.09% on the following trading day. Prices are trading close to the key technical resistance level at 48.19 (R1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 48.06 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 47.15 where further sell stops could get activated. With prices trading close to this year's high at 48.19, upside momentum might speed up should EWW be able to break out to new highs for the year.
Among the four 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 EWW. Out of 413 times, EWW closed higher 52.78% 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 seven trading days, showing a win rate of 53.27% with an average market move of 0.14%.