IYZ closes below its opening price unable to hold early session gains
iShares US Telecommunications ETF (IYZ) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
IYZ ended Wednesday at 28.16 losing $0.01 (-0.04%). Trading $0.13 higher after the open, the ETF was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on September 9th, IYZ lost -1.67% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (IYZ as at Sep 16, 2020):
Wednesday's trading range has been $0.31 (1.09%), that's slightly below the last trading month's daily average range of $0.31. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IYZ.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical resistance level at 28.25 (R1).
While 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 four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for IYZ. Out of 476 times, IYZ closed higher 54.41% 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 56.30% with an average market move of 0.34%.