EWZ finds buyers again around 24.29
iShares MSCI Brazil Capped ETF (EWZ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EWZ finished the week 10.83% higher at 24.66 after edging lower $0.14 (-0.56%) today ahead of tomorrow's Memorial Day market holiday. Trading up to $0.29 lower after the open, EWZ ETF managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (EWZ as at May 22, 2020):
Friday's trading range has been $0.58 (2.36%), that's far below the last trading month's daily average range of $0.83. 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 EWZ.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on April 27th, EWZ gained 6.32% on the following trading day.
After trading down to 24.29 earlier during the day, the market bounced off the key technical support level at 24.35 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move lower than 24.41 in the prior session, the ETF found buyers again around the same price level today at 24.29.
Although EWZ is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 24.98 where further buy stops might get triggered.
Among the six 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 EWZ ETF. Out of 370 times, EWZ closed higher 61.08% 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 50.00% with an average market move of 0.32%.