IWM climbs to highest close since April 29th


iShares Russell 2000 ETF (IWM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team

Highlights

IWM rises to highest close since April 29th
IWM finds buyers around 133.02 for the third day in a row
IWM closes above its opening price after recovering from early selling pressure
IWM closes higher for the 3rd day in a row
IWM still stuck within tight trading range

Overview

Moving higher for the 3rd day in a row, IWM ended the week 7.84% higher at 134.89 after edging higher $0.65 (0.48%) today on low volume ahead of tomorrow's Memorial Day market holiday. Today's close at 134.89 marks the highest recorded closing price since April 29th. Trading up to $1.65 lower after the open, IWM ETF managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.

Daily Candlestick Chart (IWM as at May 22, 2020):

Daily technical analysis candlestick chart for iShares Russell 2000 ETF (IWM) as at May 22, 2020

Friday's trading range has been $2.03 (1.51%), that's far below the last trading month's daily average range of $3.74. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IWM. Prices continued to consolidate within a tight trading range between 130.06 and 135.06 where it has been caught now for the whole last trading week.

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 Hanging Man.

The ETF found buyers again today around 133.02 for the third trading day in a row after having found demand at 132.58 in the prior session and at 132.38 two days ago. The last time this happened on March 31st, IWM actually lost -6.81% on the following trading day.

Though 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 135.06 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 130.06 where further sell stops might get triggered. Further buying could move prices higher should the market test April's nearby high at 136.85.

Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for IWM ETF. Out of 86 times, IWM closed higher 56.98% 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 six trading days, showing a win rate of 62.79% with an average market move of 0.08%.


Market Conditions for IWM as at May 22, 2020

Loading Market Conditions for IWM (iShares Russell 2000 ETF)...
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