IAU dominated by bears dragging the market lower throughout the day
iShares Gold Trust ETF (IAU) Technical Analysis Report for Aug 12, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, IAU finished Wednesday at 18.20 losing $0.08 (-0.44%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 18.23, IAU ETF confirmed its breakout through the prior session low after trading up to $0.04 below it intraday.
Daily Candlestick Chart (IAU as at Aug 12, 2020):
Wednesday's trading range has been $0.41 (2.21%), that's far above the last trading month's daily average range of $0.24. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for IAU.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical resistance level at 18.50 (R1). After having been unable to move lower than 18.23 in the previous session, the market found buyers again around the same price level today at 18.19. The last time this happened on Monday, IAU actually lost -5.33% on the following trading day.
Although the 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.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for IAU ETF. Out of 440 times, IAU closed higher 54.32% 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 56.59% with an average market move of 0.34%.