RSP pushes through Friday's high
Guggenheim S&P 500 Equal Weight ETF (RSP) Technical Analysis Report for Jun 29, 2020 | by Techniquant Editorial Team
RSP ended Monday at 100.40 gaining $1.96 (1.99%). Trading up to $0.74 lower after the open, the ETF managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Friday's high at 100.26, the market confirmed its breakout through the previous session high after trading up to $0.24 above it intraday.
Daily Candlestick Chart (RSP as at Jun 29, 2020):
Monday's trading range has been $2.07 (2.09%), that's slightly below the last trading month's daily average range of $2.48. 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 RSP. Prices continued to consolidate within a tight trading range between 98.06 and 100.59 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 98.43 earlier during the day, RSP bounced off the key technical support level at 99.15 (S1). The failure to close below the support could increase that levels significance as support going forward. The ETF found buyers again today around 98.43 for the third trading day in a row after having found demand at 98.06 in the prior session and at 98.37 two days ago. The last time this happened on April 3rd, RSP gained 7.57% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the nearby swing low at 98.06 where further sell stops could get activated.
Among the 11 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 RSP. Out of 388 times, RSP closed higher 62.11% 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 60.57% with an average market move of 0.37%.