PIN still stuck within tight trading range
PowerShares India ETF (PIN) Technical Analysis Report for Oct 23, 2020 | by Techniquant Editorial Team
PIN ended the week 0.75% higher at 20.19 after gaining $0.11 (0.55%) today. Trading up to $0.05 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on October 16th, PIN gained 0.30% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (PIN as at Oct 23, 2020):
Friday's trading range has been $0.13 (0.65%), that's slightly below the last trading month's daily average range of $0.15. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for PIN. Prices continued to consolidate within a tight trading range between 20.03 and 20.31 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Prices are trading close to the key technical resistance level at 20.31 (R1).
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.
Buying could speed up should prices move above the nearby swing high at 20.31 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 20.03 where further sell stops might get triggered. With prices trading close to this year's high at 20.50, upside momentum could speed up should PIN be able to break out to new highs for the year.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Up Close near high of period" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for PIN. Out of 640 times, PIN closed lower 58.28% 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 52.81% with an average market move of -0.42%.