IWM finds buyers around 167.34 for the third day in a row
iShares Russell 2000 ETF (IWM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
IWM ended the week 1.83% higher at 167.90 after losing $0.65 (-0.39%) today ahead of tomorrow's Presidents' Day market holiday. 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 (IWM as at Feb 14, 2020):
Friday's trading range has been $1.44 (0.85%), that's below the last trading month's daily average range of $1.91. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IWM. Prices continued to consolidate within a tight trading range between 167.11 and 168.95 where it has been caught now for the last three trading days.
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. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 167.12 (S1). The market found buyers again today around 167.34 for the third trading day in a row after having found demand at 167.11 in the prior session and at 167.28 two days ago. The last time this happened on November 22, 2019, IWM gained 2.12% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 168.95 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 167.11 where further sell stops could get activated. With prices trading close to this year's high at 170.56, upside momentum might speed up should IWM ETF be able to break out to new highs for the year.
Among the six 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 IWM ETF. Out of 496 times, IWM closed higher 57.26% 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 59.68% with an average market move of 0.67%.