IWM closes higher for the 3rd day in a row
iShares Russell 2000 ETF (IWM) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, IWM finished Wednesday at 154.82 gaining $1.45 (0.95%). Closing above Tuesday's high at 154.70, the ETF confirmed its breakout through the previous session high after trading up to $2.14 above it intraday.
Daily Candlestick Chart (IWM as at Sep 16, 2020):
Wednesday's trading range has been $2.99 (1.94%), that's slightly above the last trading month's daily average range of $2.79. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IWM.
IWM ETF managed to close back above the 20-day moving average at 154.40 for the first time since September 2nd. Unable to break through the key technical resistance level at 156.16 (R1), the market closed below it after spiking up to 156.84 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on August 27th, IWM actually gained 0.85% on the following trading day.
While IWM is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
As prices are trading close to September's high at 158.98, upside momentum could speed up should the ETF mark new highs for the month.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed above last periods high" stand out. Its common bullish interpretation has been confirmed for IWM ETF. Out of 419 times, IWM closed higher 55.37% 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 56.80% with an average market move of 0.28%.