EWW dominated by bears dragging the market lower throughout the day
iShares MSCI Mexico Capped ETF (EWW) Technical Analysis Report for Oct 12, 2020 | by Techniquant Editorial Team
EWW ended Monday at 35.56 losing $0.26 (-0.73%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EWW as at Oct 12, 2020):
Monday's trading range has been $0.39 (1.09%), that's far below 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 slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EWW.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. In spite of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical resistance level at 36.03 (R1). After having been unable to move above 36.03 in the prior session, the ETF ran into sellers again around the same price level today, failing to move higher than 35.94. The last time this happened on October 7th, EWW actually gained 3.06% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and might now be heading back down towards the mean of the Bollinger Bands at 33.50.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 36.03 where further buy stops might get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for EWW. Out of 330 times, EWW closed higher 52.42% 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 eight trading days, showing a win rate of 55.76% with an average market move of 0.32%.