IAU closes within prior day's range after lackluster session
iShares Gold Trust ETF (IAU) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
IAU finished the week -0.54% lower at 16.58 after gaining $0.10 (0.61%) today on low volume ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (IAU as at May 22, 2020):
Friday's trading range has been $0.09 (0.54%), that's far below the last trading month's daily average range of $0.18. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IAU.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving lower in the prior session, the ETF managed to close higher but below the previous day's open, forming a bullish Harami Candle. The last time this candlestick pattern showed up on April 20th, IAU actually lost -0.74% on the following trading day.
After having been unable to move above 16.61 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 16.60.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 16.75 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 16.40 where further sell stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Harami Candle" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for IAU ETF. Out of 35 times, IAU closed lower 71.43% 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 62.86% with an average market move of -0.76%.