IWB closes above its opening price after recovering from early selling pressure
iShares Russell 1000 ETF (IWB) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
IWB ended the week 3.41% higher at 163.54 after edging higher $0.41 (0.25%) today ahead of tomorrow's Memorial Day market holiday. Trading up to $0.94 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (IWB as at May 22, 2020):
Friday's trading range has been $1.31 (0.8%), that's far below the last trading month's daily average range of $2.55. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IWB. Prices continued to consolidate within a tight trading range between 161.43 and 164.78 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on April 16th, IWB actually gained 2.84% on the following trading day.
After having been unable to move lower than 162.51 in the prior session, the market found buyers again around the same price level today at 162.41.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the nearby swing high at 164.78 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 161.43 where further sell stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for IWB. Out of 404 times, IWB closed higher 59.16% 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 62.87% with an average market move of 0.47%.