QQQ closes within prior day's range after lackluster session
PowerShares QQQ ETF (QQQ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
QQQ finished the week 2.86% higher at 229.66 after edging higher $0.79 (0.35%) today on low volume ahead of tomorrow's Memorial Day market holiday. Trading up to $0.96 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (QQQ as at May 22, 2020):
Friday's trading range has been $2.37 (1.04%), that's far below the last trading month's daily average range of $4.02. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for QQQ. Prices continued to consolidate within a tight trading range between 225.47 and 232.14 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a Bullish Short Candle showed up on Wednesday, QQQ actually lost -1.09% on the following trading day.
After trading down to 227.50 earlier during the day, the ETF bounced off the key technical support level at 228.10 (S1). The failure to close below the support might increase that levels importance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 232.14 where further buy stops might get activated. With prices trading close to this year's high at 237.47, upside momentum could speed up should QQQ be able to break out to new highs for the year.
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 QQQ. Out of 397 times, QQQ closed higher 64.23% 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 67.25% with an average market move of 1.06%.