FXI breaks below 50-day moving average for the first time since May 4th
iShares China Large-Cap ETF (FXI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, FXI finished the week -1.19% lower at 37.50 after tanking $1.04 (-2.7%) today ahead of tomorrow's Memorial Day market holiday. Today's close at 37.50 marks the lowest recorded closing price since May 1st.
Daily Candlestick Chart (FXI as at May 22, 2020):
Friday's trading range has been $0.36 (0.96%), that's below the last trading month's daily average range of $0.49. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FXI.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 37.20 (S1). FXI ETF closed below the 50-day moving average at 37.62 for the first time since May 4th. When this moving average was crossed below the last time on May 1st, FXI actually gained 0.94% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Further selling might move prices lower should the market test April's close-by low at 35.99.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for FXI ETF. Out of 497 times, FXI closed higher 55.33% 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 53.72% with an average market move of 0.46%.