IEF dominated by bears dragging the market lower throughout the day
iShares 7-10 Year Treasury Bond ETF (IEF) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
IEF ended the month -0.06% lower at 121.87 after losing $0.22 (-0.18%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 121.92, the market confirmed its breakout through the prior session low after trading up to $0.13 below it intraday.
Daily Candlestick Chart (IEF as at Jun 30, 2020):
Tuesday's trading range has been $0.40 (0.33%), that's slightly above the last trading month's daily average range of $0.35. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IEF.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Despite a strong opening the ETF closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on June 25th, IEF actually gained 0.27% on the following trading day.
Prices are trading close to the key technical support level at 121.74 (S1). After having been unable to move above 122.14 in the prior session, IEF ran into sellers again around the same price level today, missing to move higher than 122.19.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Trading close to April's high at 122.69 we could see further upside momentum if potential buy stops at the level get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for IEF. Out of 47 times, IEF closed higher 55.32% 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 two trading days, showing a win rate of 57.45% with an average market move of 0.03%.