IYZ finds buyers around 27.33 for the forth day in a row
iShares US Telecommunications ETF (IYZ) Technical Analysis Report for Jul 14, 2020 | by Techniquant Editorial Team
IYZ ended Tuesday at 27.78 gaining $0.36 (1.31%) on high volume. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (IYZ as at Jul 14, 2020):
Tuesday's trading range has been $0.51 (1.87%), that's above the last trading month's daily average range of $0.42. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for IYZ. Prices continued to consolidate within a tight trading range between 27.33 and 27.84 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on April 20th, IYZ actually lost -3.21% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Piercing Pattern and the White Candle which are both known as bullish patterns.
The market managed to close back above the 50-day moving average at 27.56. The ETF was bought again around 27.33 after having seen lows at 27.38, 27.36 and 27.33 in the last three trading sessions. Obviously there is something going on at that level.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might speed up should prices move below the nearby swing low at 27.33 where further sell stops could get triggered. As prices are trading close to July's low at 27.32, downside momentum might accelerate should IYZ mark new lows for the month.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for IYZ. Out of 7 times, IYZ closed lower 57.14% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 85.71% with an average market move of -2.56%.