PIN finds buyers at key support level
PowerShares India ETF (PIN) Technical Analysis Report for May 18, 2020 | by Techniquant Editorial Team
PIN finished Monday at 15.37 gaining $0.12 (0.79%). Closing above Friday's high at 15.30, the market confirmed its breakout through the prior session high after trading up to $0.15 above it intraday.
Daily Candlestick Chart (PIN as at May 18, 2020):
Monday's trading range has been $0.34 (2.24%), that's slightly above the last trading month's daily average range of $0.29. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for PIN.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. Despite a weak opening the ETF managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 15.11 earlier during the day, PIN bounced off the key technical support level at 15.12 (S1). The failure to close below the support might increase that levels significance as support going forward. After spiking up to 15.45 during the day, the market found resistance at the 20-day moving average at 15.39. After having been unable to move lower than 15.15 in the prior session, the ETF found buyers again around the same price level today at 15.11. The last time this happened on May 11th, PIN gained 3.11% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 14.89 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for PIN. Out of 28 times, PIN closed lower 60.71% 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 67.86% with an average market move of -0.63%.