IWM still stuck within tight trading range
iShares Russell 2000 ETF (IWM) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, IWM ended the month 2.92% higher at 147.36 after losing $1.40 (-0.94%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (IWM as at Jul 31, 2020):
Friday's trading range has been $3.75 (2.53%), that's above the last trading month's daily average range of $2.85. 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 lower than usual for IWM. Prices continued to consolidate within a tight trading range between 144.67 and 149.45 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 June 2nd, IWM actually gained 2.41% on the following trading day.
After trading as low as 144.67 during the day, the market found support at the 200-day moving average at 145.89.
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 149.45 where further buy stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for IWM ETF. Out of 438 times, IWM closed higher 62.56% 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 60.50% with an average market move of 0.60%.