IWV stuck within tight trading range
iShares Russell 3000 ETF (IWV) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
IWV finished Wednesday at 198.15 losing $0.55 (-0.28%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (IWV as at Sep 16, 2020):
Wednesday's trading range has been $2.40 (1.2%), that's slightly below the last trading month's daily average range of $2.75. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IWV. Prices continued to consolidate within a tight trading range between 196.44 and 200.40 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Regardless of a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on August 11th, IWV actually gained 1.38% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 196.12 (S1). After spiking up to 200.40 during the day, the ETF found resistance at the 20-day moving average at 199.95. After having been unable to move lower than 198.05 in the previous session, IWV found buyers again around the same price level today at 198.00.
Though the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for IWV. Out of 144 times, IWV closed higher 61.81% 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 62.50% with an average market move of 0.48%.