IYZ runs into sellers again around 28.07
iShares US Telecommunications ETF (IYZ) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, IYZ finished the week 0.11% higher at 27.82 after losing $0.19 (-0.68%) today. Closing below Thursday's low at 27.84, the market confirmed its breakout through the prior session low after trading up to $0.20 below it intraday.
Daily Candlestick Chart (IYZ as at Sep 18, 2020):
Friday's trading range has been $0.43 (1.53%), that's above the last trading month's daily average range of $0.33. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IYZ.
One bullish candlestick pattern matches today's price action, the Last Engulfing Bottom Pattern. The last time a Last Engulfing Bottom Pattern showed up on August 21st, IYZ gained 0.87% on the following trading day.
After trading down to 27.64 earlier during the day, the ETF bounced off the key technical support level at 27.77 (S1). The failure to close below the support could increase that levels significance as support going forward. After having been unable to move above 28.11 in the previous session, IYZ ran into sellers again around the same price level today, missing to move higher than 28.07.
Although the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 27.62 where further sell stops might get activated. Trading close to July's low at 27.32 we could see further downside momentum if potential sell stops at the level get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for IYZ. Out of 426 times, IYZ closed higher 55.40% 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 53.99% with an average market move of 0.32%.