IEF breaks back above 20-day moving average
iShares 7-10 Year Treasury Bond ETF (IEF) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, IEF ended the week -0.06% lower at 121.88 after gaining $0.23 (0.19%) today on low volume ahead of tomorrow's Memorial Day market holiday. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 121.85, the ETF confirmed its breakout through the prior session high after trading up to $0.03 above it intraday.
Daily Candlestick Chart (IEF as at May 22, 2020):
Friday's trading range has been $0.19 (0.16%), that's far below the last trading month's daily average range of $0.41. 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 IEF.
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 market managed to close back above the 20-day moving average at 121.67 for the first time since May 15th. Prices are trading close to the key technical resistance level at 122.15 (R1). After having been unable to move above 121.85 in the previous session, IEF ran into sellers again around the same price level today, missing to move higher than 121.88. The last time this happened on May 15th, IEF lost -0.62% on the following trading day.
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 122.23 where further buy stops might get triggered. Further buying could move prices higher should the market test April's close-by high at 122.69.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for IEF. Out of 433 times, IEF closed higher 56.12% 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 54.73% with an average market move of 0.12%.