IEF closes below its opening price unable to hold early session gains
iShares 7-10 Year Treasury Bond ETF (IEF) Technical Analysis Report for Aug 14, 2020 | by Techniquant Editorial Team
IEF finished the week -0.9% lower at 121.43 after edging higher $0.06 (0.05%) today. Trading $0.11 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Wednesday, IEF lost -0.21% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (IEF as at Aug 14, 2020):
Friday's trading range has been $0.17 (0.14%), that's below the last trading month's daily average range of $0.25. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IEF.
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.
Prices are trading close to the key technical support level at 121.37 (S1).
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 122.33.
Though 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.
Selling might speed up should prices move below the close-by swing low at 121.25 where further sell stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for IEF. Out of 727 times, IEF closed higher 56.26% 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 55.98% with an average market move of 0.15%.