EWW breaks back below 50-day moving average
iShares MSCI Mexico Capped ETF (EWW) Technical Analysis Report for Sep 21, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, EWW ended Monday at 32.69 losing $0.66 (-1.98%). Trading up to $0.41 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on September 11th, EWW gained 2.56% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (EWW as at Sep 21, 2020):
Monday's trading range has been $0.60 (1.85%), that's slightly below the last trading month's daily average range of $0.66. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EWW.
One bullish candlestick pattern matches today's price action, the Hammer.
After trading as low as 32.11 during the day, the market found support at the 100-day moving average at 32.52. EWW closed back below the 50-day moving average at 33.26 for the first time since September 10th.
Although the ETF is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Further selling could move prices lower should the market test August's nearby low at 32.03.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hammer" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for EWW. Out of 24 times, EWW closed lower 54.17% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 66.67% with an average market move of -3.37%.