IAU ends the day on a bullish note closing near the high of the day
iShares Gold Trust ETF (IAU) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, IAU finished the week 0.87% higher at 15.13 after gaining $0.06 (0.4%) today on low volume ahead of tomorrow's Presidents' Day market holiday. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (IAU as at Feb 14, 2020):
Friday's trading range has been $0.05 (0.33%), that's far below the last trading month's daily average range of $0.10. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for IAU.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a White Candle showed up on February 5th, IAU gained 0.60% on the following trading day.
After trading down to 15.09 earlier during the day, the market bounced off the key technical support level at 15.09 (S1). The failure to close below the support might increase that levels significance as support going forward.
Although IAU ETF is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
With prices trading close to this year's high at 15.19, upside momentum might speed up should the ETF be able to break out to new highs for the year. As prices are trading close to February's high at 15.17, upside momentum could accelerate should IAU mark new highs for the month.
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 IAU ETF. Out of 361 times, IAU closed higher 56.79% 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 52.63% with an average market move of 0.33%.