GOVT dominated by bears dragging the market lower throughout the day
iShares U.S. Treasury Bond (GOVT) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
GOVT finished the month unchanged at 27.99 after losing $0.04 (-0.14%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 28.00, the market confirmed its breakout through the previous session low after trading up to $0.03 below it intraday.
Daily Candlestick Chart (GOVT as at Jun 30, 2020):
Tuesday's trading range has been $0.08 (0.29%), that's slightly above the last trading month's daily average range of $0.07. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GOVT.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Even with a strong opening iShares U. S. closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns. The last time a Bearish Belt-hold showed up on August 13, 2019, GOVT actually gained 0.68% on the following trading day.
After trading down to 27.97 earlier during the day, the ETF bounced off the key technical support level at 27.98 (S1). The failure to close below the support could increase that levels importance as support going forward. GOVT ran into sellers again today around 28.05 for the third trading day in a row after having found sellers at 28.04 in the previous session and at 28.04 two days ago.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for iShares U. S.. Out of 42 times, GOVT closed higher 61.90% 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 59.52% with an average market move of 0.13%.