EWZ runs into sellers around 29.06 for the third day in a row
iShares MSCI Brazil Capped ETF (EWZ) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
EWZ ended the month 5.92% higher at 28.80 after edging lower $0.15 (-0.52%) today. Trading up to $0.28 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 previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EWZ as at Jun 30, 2020):
Tuesday's trading range has been $0.71 (2.48%), that's far below the last trading month's daily average range of $1.08. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for EWZ. Prices continued to consolidate within a tight trading range between 28.08 and 29.06 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on June 4th, EWZ gained 3.86% on the following trading day.
Prices are trading close to the key technical support level at 28.77 (S1). After spiking up to 29.06 during the day, the market found resistance at the 100-day moving average at 28.96. The ETF ran into sellers again today around 29.06 for the third trading day in a row after having found sellers at 28.96 in the previous session and at 28.96 two days ago.
EWZ shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the close-by swing low at 28.08 where further sell stops could get triggered. As prices are trading close to June's low at 27.12, downside momentum might speed up should EWZ ETF mark new lows for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 100" stand out. Its common bearish interpretation has been confirmed for EWZ ETF. Out of 24 times, EWZ closed lower 66.67% 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 62.50% with an average market move of -1.65%.