EWW still stuck within tight trading range
iShares MSCI Mexico Capped ETF (EWW) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, EWW ended the week 5.85% higher at 30.59 after edging higher $0.21 (0.69%) today on low volume ahead of tomorrow's Memorial 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 (EWW as at May 22, 2020):
Friday's trading range has been $0.86 (2.86%), that's slightly below the last trading month's daily average range of $0.90. Weekly volatility is also lower, being slightly below 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 29.27 and 30.82 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern. The last time a White Candle showed up on Monday, EWW actually lost -3.81% on the following trading day.
After having been unable to move above 30.82 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 30.68.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 30.82 where further buy stops might get activated. As prices are trading close to May's high at 31.11, upside momentum could speed up should the ETF mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for EWW. Out of 52 times, EWW closed higher 55.77% 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 57.69% with an average market move of 0.25%.