IYZ closes above its opening price after recovering from early selling pressure
iShares US Telecommunications ETF (IYZ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
IYZ ended the week 3.52% higher at 27.02 after gaining $0.14 (0.52%) today ahead of tomorrow's Memorial Day market holiday. Trading up to $0.10 lower after the open, the 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 (IYZ as at May 22, 2020):
Friday's trading range has been $0.29 (1.08%), that's far below the last trading month's daily average range of $0.49. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for IYZ. Prices continued to consolidate within a tight trading range between 26.48 and 27.28 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a Bullish Short Candle showed up on April 24th, IYZ gained 1.74% on the following trading day.
After trading as low as 26.74 during the day, the market found support at the 20-day moving average at 26.83. Prices are trading close to the key technical resistance level at 27.16 (R1).
IYZ shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the close-by swing high at 27.28 where further buy stops could get activated. As prices are trading close to May's high at 27.38, upside momentum might accelerate should the ETF mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for IYZ. Out of 723 times, IYZ closed higher 51.73% 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 53.94% with an average market move of 0.10%.