HYG finds buyers at key support level
iShares iBoxx $ High Yield Corporate Bond (HYG) Technical Analysis Report for Sep 13, 2019 | by Techniquant Editorial Team
HYG finished the week 0.02% higher at 87.16 after losing $0.16 (-0.18%) today on high volume. Trading $0.14 higher after the open, iShares iBoxx was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (HYG as at Sep 13, 2019):
Friday's trading range has been $0.20 (0.23%), that's below the last trading month's daily average range of $0.27. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for HYG.
Two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns. The last time a Shooting Star showed up on March 19th, HYG actually gained 0.43% on the following trading day.
After trading down to 87.11 earlier during the day, the ETF bounced off the key technical support level at 87.14 (S1). The failure to close below the support might increase that levels significance as support going forward.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could accelerate should prices move above the nearby swing high at 87.43 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 87.02 where further sell stops might get activated. With prices trading close to this year's high at 87.65, upside momentum could accelerate should the market be able to break out to new highs for the year.
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 iShares iBoxx. Out of 357 times, HYG closed higher 57.70% 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 58.54% with an average market move of 0.10%.